Chart of the Week Bearish USDCAD
Bearish USDCAD: USD: Next week could be a relatively quiet period in between this past week’s market action and the decisions that beg1n to come to the fore starting the week after next. Those approaching events will include: The Trump administration’s decision on auto tariffs on November 17th. The need to find an alternate venue and timing to potentially sign a US-China ‘phase one’ trade agreement after the cancellation of the APEC Summit in Chile that was to be held on November 16th –17th. The need for a new Continuing Resolution to fund the government past November 21st and therefore avoid another shutdown. Plus the long-stated goal of the US administration to pass the USMCA/CUSMA trade deal before US Thanksgiving on November 28th. This looks increasingly unlikely to be achieved. Positioning shifted away from the USD. On the CFTC front, large non-commercial accounts and leveraged accounts alike pared their net implied long dollar bias in aggregate in the latest week. Elsewhere, asset manager accounts also increased their net implied dollar shorts in the latest week.
CAD:Friday’s Labour Force Survey for October is forecast to post a modest rise of around 15,000. One key will be to look beneath the headline by excluding election related hiring. Most of that effect is likely to be captured in public administration employment but spillovers into media and professionals categories are feasible. Elections Canada says it hired almost 300,000 workers across the country to run the election, but the issue is how many will be captured as employed during the LFS reference week which is the calendar week that includes the 15th of each month. The election was held on Monday October 21st and so game day workers running the polling stations won’t count in the jobs tally. What might count would be a part of the workers running advance polling from Friday October 11th to the 14th, namely the people working on Sunday and Monday that week
From a technical and trading perspective the USD has formed a bearish monthly key reversal pattern, this portends further weakness ahead for the USD. THe USDCAD has tested the central tendency of the VWAP coinciding with the monthly pivot, this area met strong resistance Friday. Price posted a bearish key day reversal closing at the lows of the day , I am anticipating some consolidation as we head into the New York open today, if price breaches the 1.3130 support area I am expecting continued weakness, initially targeting 1.30 support and then on to test the equidistant swing objective at 1.2906
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!