WEAKER OIL HASN’T HELPED
The Bank of Canada maintains a growing hawk bias, but this has not helped the Canadian dollar in the face of strong energy price sales. The fall in oil and gas prices has proved to be a significant change for Loonie as fears grow as the world economy begins to slow; come across a basic account. However, the technical picture is more favorable in the short term. The battle for weaknesses in CAD crossings may have ended in recent weeks, with tabular conditions for a recovery in CAD / JPY rates and a reduction in USD / CAD rates by the end of June.
CAD/JPY RATE TECHNICAL ANALYSIS: DAILY CHART (JUNE 2021 TO JUNE 2022) (CHART 1)
CAD / JPY rates have rebounded over the past two weeks after breaking their December 2014 high and selling at their highest level since February 2008. But support was seen in the previous resistance in the range that began. in April, indicating that the technical condition remains strong. The above order requires a measured movement above 108.00, which has not yet been achieved, so there is the potential for further shaking above before fatigue occurs.
CAD / JPY rates have not yet seen a significant change in dynamics. The pair is at the top of their daily 5-, 8-, 13- and 21-EMA envelopes, before the ascending order. The daily MACD has a lower trend, although it remains above its signal line, while the daily Slow Stochastics is below its midline for the first time since the end of May. A step back to last week’s 105.52 high would provide a strong confirming signal that the next stage above has already begun.
USD/CAD RATE TECHNICAL ANALYSIS: DAILY CHART (JUNE 2021 TO JUNE 2022) (CHART 2)
Since the end of October 2021, USD / CAD exchange rates have reached resistance to an upwardly sloping parallel channel. The double peak could be reduced to 1.3077, indicating that the new branch is higher is over. Momentum remains strong – USD / CAD rates are above their bullish EMA envelope, which is bullish, daily MACD has a higher trend through the signal line and daily Slow Stochastics is overbought – but moving below the daily 5- EMA guarantees strong consideration that could start a short swing at 1.2600. Conversely, a move above 1.3077 could ignore this view and create a new bullish chance for a breakthrough.
IG CLIENT SENTIMENT INDEX: USD/CAD RATE FORECAST (JUNE 20, 2022) (CHART 3)
USD / CAD: Retailers data show 35.87% of short-term traders with a ratio of short and high traders from 1.79 to 1. The number of short-lived traders is 22.18%, which was more than yesterday and by 31.14 % lower than last week, while the number of traders who do not have a short trade was 12.38% higher than yesterday and 76.60% higher than last week.
We often have a conflicting view of people’s sentiment, and the fact that traders are not short suggests that USD / CAD prices may continue to rise.
The position is less short than yesterday, but more short since last week. The combination of current sentiment and recent changes gives us an even more mixed distortion of USD / CAD trading.