Following analysis on Goldman Sachs, they believe that due to the contraction in the global economy due to the effects of trade wars between US and China.
There is a synopsis staing that the Bank of Canada will soon become dovish even though the economy is in good shape. the reason for this is because all global economies are taking a dovish approach to monetary policy so that means that Canada will soon follow.
In Bank of Canada's next meeting I believe that there will be talk of reducing interest rates in the long term which will weaken the CAD against the USD.
Furthermore, Goldman Sachs has a target of 1.360 long term. Which makes them quite bearish on the CAD against the USD
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Furthermore, I may take some profits from the first resistance point at 1.33750 depending on the calibre of the move.
Your basing it off of Goldman Sachs? Citi group also came out with a a forecast and is bearish USD against the CAD. Who is right? Well, technically, they both can. Hope you have your own analysis
dcaluzzi
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Does my graph have a target of 1.360? It doesn't, i'm simply using the research behind Goldman Sachs idea to further enhance the understanding of my potential trade. As you can see, the trade setup isn't confirmed yet and only if it does confirm will we see the price move up.
theyfollowme
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@dcaluzzi, sorry, I didn’t mean to come off rude. I was just trying to state that they can both be right, depending on the timeline.
Just out of curiosity, what do you think about making a lower low, and then failing to make a higher high? Do you think there is a probability, however low, that we test that?
dcaluzzi
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@theyfollowme, All good mate, exactly, USD/CAD will probably hit both targets over any timeframe just like you said,
It's tough to say because it failed to do so because of that resistance and the low volatility on Friday last week because being the end of the week and end of the month, there is less volume in the market. However, once it does break resistance I do see it making higher highs and higher lows just because it will have that room to run.