10/12 – Remember this? USDCAD put in the high 5 weeks after crude’s low. It took a few weeks longer than I thought it would but the USDCAD path took to its high and where it reversed was not random. We’ve spent A LOT of time on USDCAD in the last few months. In fact, USDCAD has appeared in 15 of the 26 SB Swing Updates since September 5th. Here are a few highlights from the 9/16 and 9/30 SB Swing Updates.
USDCAD Daily (from 9/16 SB Swing Update)
9/16 – Also, still think USDCAD can make a final high and top out near 1.3462 (61.8% of 2002-2007 decline) before a serious decline. The current situation is beyond tricky and it’s best to let the market sort itself out (final rally could come from near here or from near the lower parallel at 1.3020). I’ll change my mind if this breaks the lower parallel (daily close).
2 days later, USDCAD traded down to 1.3012 and quickly reversed higher. The rate reached 1.3456 on 9/29. On 9/30, the following was published.
USDCAD Daily (from 9/30 SB Swing Update)
9/30 – The top so far is 1.3456…safe to say the slope works! I was asked during the Midweek Webinar today ‘how low can it go?’ First, I don’t know if this is a top but I know that I want to be short! It’s always better to think, ‘where is the risk / where is the setup’. Old support has become resistance (within an uptrend), so I’m looking towards the lower parallel, which is near 1.3150 over the next few days. If that breaks, then focus would shift to the March high at 1.2834.
Fast forward 2 weeks and USDCAD is trading some 5 big figures (500 pips) lower. What now? The mentioned 1.2834 and some longer term slope support (not shown here) isn’t far from current levels but the impulsive path is probably lower for a while.