The Loonie continues to slide versus the greenback on the short term, the USD/CAD has reached fresh new highs today and looks determined to climb even higher. Price has increased as the Canadian economic numbers have disappointed, while the United States data have come mixed today, the US inflation figures have produced a surprise and have come better. The currency par has resumed the upward movement after the yesterday’s drop, the greenback was lifted by the USDX’s rally, the index has edged higher aggressively after the US data were sent to the public.
The Loonie has taken a hit from the Manufactuirng Sales, which has increased only by 0.1% in August, less compared to the 0.6% forecast, has disappointed because has reached the lowest growth of the last 2-months, the economic indicator has increased by 0.8% in July, while the Canadian Foreign Securities Purchases has dropped from 9.02B o 5.23B, has dropped unexpectedly, the currency traders have expected to see an increase to 10.12B.
As I’ve said higher, the USD has received a helping hand from the US inflation figures, the Consumer Price Index has increased by 0.2%, more compared to the 0.1% estimate, has increased significantly compared to the 0.0% in July. Moreover the Core CPI has increased by 0.3% in August, exceeding the 0.2% prediction, has beaten the 0.1% growth from July. Unfortunately the Prelim UoM Consumer Sentiment has remained steady at 89.8 points even if the economists have forecasted an increase to 91.0 points, the Prelim UoM Inflation Expectations have increased by 2.3%, less compared to the 2.5% in the previous reading period. The is to release the TIC Long –Term Purchase indicator, which is expected to increase from -3.6% to 30.2B.

The price has edged higher today and has managed to climb again above the lower median line (ML) of the ascending pitchfork, has found temporary resistance at the 1.3247 level (today’s high) and now could come down to retest the lower median line of the ascending pitchfork. The rate will climb much higher if will have enough energy to stabilize above the lower median line, you can see that the rate has moved sideways in the last period and a breakout above the 1.3251 previous high will attract more buyers, which will drive the rate toward the median line (ML) of the ascending pitchfork. Could become strongly bullish if will consolidate here, could find temporary resistance also at the 38.2% retracement level.

I’ve added a minor ascending pitchfork on the H4 chart o understand better the price action, remains to see what will happen because personally I’m seeing a minor drop after the failure to make new highs, the rate looks exhausted on the short term and could drop a little to retest the minor median line (ml) of the ascending pitchfork, a drop below the median line (ml) and below the ML, will open the door for ore declines again.

One thought on “USD/CAD could become strongly bullish again September 16, 2016”

  1. Rana Haq says:

    Thank you for your analysis.

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