Weaker CAD drives EURCAD & GBPCAD Up
25th October 2017
Our Quarterly USDCAD view is a bullish one and is currently being driven by a weaker CAD across the board. That is reflected in positive moves last week in EURCAD and GBPCAD that confirmed a medium term bullish tone for these crosses.
In EURCAD the spot price has been flirting with the 21 week displaced moving average for 5 weeks, supported by the top of the weekly Ichimoku Cloud. But the market lacked confirmation in the shape of a positive cross in the EURCAD RSI indicator until last week.
With the Keltner channel showing a more bullish bias we’re now looking for the upside to develop to an initial objective of 1.5006 (Fibonacci extension) then August’s 1.5075 EURCAD peak.
GBPCAD – Things are a bit more tentative here as sterling remains volatile and demand weaker and more fragile.
Nonetheless last week’s close back above the 21 week displaced moving average confirmed the RSI break created 5 weeks previously. Here spot is trading below the Ichimoku Cloud, which also emphasises a less positive tone. But there is scope to remain below the Cloud and still rise significantly and that is what our signals for sentiment are indicating.
So in GBPCAD we’re looking at upside potential of 1.6796, the September high, then the 1.6908/35 area.
But watch those moving averages!
