USDCAD Medium-Term Outlook

21 Agu 2019

21/08/2019

Starting from the weekly, USDCAD has been in overall uptrend with strong bullish rallies equally followed clean sell-off periods.

-Average bullish rally on the weekly TF is 820 pips.
-Currently in wave C > D on the 5 Elliot wave count. Wave move upwards.

Longer Term Bullish Bias:
USDCAD only completed 350pips of average bullish rally.
In upward Elliot wave move.
Price Trading above 200 EMA on Weekly and Daily.
1.3340 Price Action Level (R)
1.3400 Psychological Level (R)
1.3430 Price Action Level (R)
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Shorter term bearish bias: over -week 19th August.
-USDCAD currently facing resistance at the 1.3340 level, has created a triple top with the RSI diverging on the daily TF.
If the 1.33 handle fails to hold we could see USDCAD dropping to the 1.32.
1.3260 - H4 Price Action Level (S)
1.3220 - 0.382 Fib level (S)
1.3200 - Psychological level (S)

Possible Entries :
Long - Find entry at 1.3340 level Long (B&R)
Short - Break and retest of 1.3300 Level

USD Current outlook:

-GDP has slowed down dropping from 3.2 to 2.3 since July 2018, yet Trump is insisting his economy is doing great.
-Riding federal reserve rates makes it more expensive for people to borrow money. Trump again is urging to start lowering fed rates to help boost borrowing and get business moving. Current rate 2.25%
-Political instability with China and US trade wars
-Other major economies also seeing GDP fall meaning growth is falling on a global scale and we could be entering into the next global recession in the next couple of years.
-unemployment rate has relatively good falling from 4% in Jan 2019 to 3.7% currently. However, unemployment has been steadily falling over the last few years and looks a potential bottom is in.

Thus if a recession does occur this would be inline with the unemployment starting to rise again and the fed cutting rates to try and boost borrowing and get businesses and consumers spending.