Last week USDCAD was in a counter trend pullback on a decline in oil prices. Price was in an ascending channel making higher highs and higher lows. A weak NFP report for USD caused the end of the rally closing the week at support and the bottom of the channel around 1.35. Start of this week price has already moved below the support making a new low at 1.34500 and bounced. A few scenarios to take place over the week are as follows and are related to the fundamentals of USD & CAD dollars and correlated mainly to the price of US Oil:
Technical Analysis:
There are 3 possible scenarios: 1) Oil up > USDCAD down. 2) Oil falls to support @ $46 then rises > UCAD rises to resistance at 1.35500 and falls (double top reversal pattern). 3) Oil continues to slide below $46 to $45 > UCAD tests the major supply zone (not yet tested), if Oil breaks these zones UCAD will start another uptrend making HH and HL.
Fundamental Analysis:
1) Weaker dollar (Weak NFP, Weak Data, Lower chance of FED rate hike, geopolitical issues (terrorism), etc). 2) CAD news (news this week for CAD, should be better than previous news releases, waiting on pending data to be released.) 3) Oil prices (OPEC continuing to slash production for another 9 months, if oil inventories are continuing to fall Oil should rise). Trying to get oil back to $50/barrel.
Technical Analysis:
There are 3 possible scenarios: 1) Oil up > USDCAD down. 2) Oil falls to support @ $46 then rises > UCAD rises to resistance at 1.35500 and falls (double top reversal pattern). 3) Oil continues to slide below $46 to $45 > UCAD tests the major supply zone (not yet tested), if Oil breaks these zones UCAD will start another uptrend making HH and HL.
Fundamental Analysis:
1) Weaker dollar (Weak NFP, Weak Data, Lower chance of FED rate hike, geopolitical issues (terrorism), etc). 2) CAD news (news this week for CAD, should be better than previous news releases, waiting on pending data to be released.) 3) Oil prices (OPEC continuing to slash production for another 9 months, if oil inventories are continuing to fall Oil should rise). Trying to get oil back to $50/barrel.