The Loonie has resumed the rally despite what some might perceive to be overextended conditions. The question traders are asking is whether this is now the top? The US dollar is on fire due to fundamentals, yet commodities could be on the brink to a move higher which would lend support to CAD.
From a technical standpoint, we can evaluate the price action and multi time frame market structures to determine the probabilities of whether this is, at least, a meanwhile top. The following analysis will illustrate that USDCAD’s market structure and price action are turning bearish.
In the meantime, USDCAD pair bulls are less effective amid steady oil prices. The supply worries from Russia vs. reduction in global growth forecasts and a pandemic fear in China is restricting the black gold from any major movement in these trading sessions.
Apart from the US Core PCE, investors will also focus on the US Gross Domestic Product (GDP) numbers, which are also due on Thursday. A preliminary estimate for the annualized GDP at 1.1% indicates underperformance against the prior print of 6.9%.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.