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In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDCAD for OCT 16th, 2024.
Key Takeaways
Canada CPI shrink: Canada announced its monthly CPI rate for September on Tuesday, and inflation slowed down to -0.4% beyond expectations. The Canadian economy is under great pressure, and the market has begun to increase its bets on a sharp 50 basis point rate cut by the Bank of Canada.
Crude oil drags down the CAD: The latest monthly report of the IEA shows that it has lowered its demand expectations for this year. The IEA believes that the slowdown in Chinese demand is the main reason for the weakening of global demand growth. The world’s three major oil forecasting agencies have all lowered their expectations for global demand growth in 2024. The 5% drop in crude oil has reduced one more reason to support the appreciation of the Canadian dollar.
Technical Analysis
Daily Chart Insights
(USDCAD Daily Price Chart, Source: Ultima Markets MT4)
Stochastic oscillator: Both the fast and slow line indicators have risen to the overbought area, suggesting that the current bullish trend is strong. However, it is worth noting that the fast line is about to cross the slow line to send a short signal, and there may be a probability of a correction in the short-term exchange rate.
Neckline resistance: In August this year, the exchange rate formed an M-top pattern, and the exchange rate fell below the neckline and continued to decline. Currently, USD/CAD has risen again to the neckline. For four consecutive trading days, the exchange rate has not broken through this resistance. Yesterday’s closing price formed a pin bar, suggesting that the exchange rate may enter a correction trend.
H1 Chart Insights
(USDCAD H1 Price Chart, Source: Ultima Markets MT4)
Stochastic Oscillator: The indicator sends a bullish signal in the oversold area, suggesting that short-term bulls have the upper hand. Based on the fact that the daily cycle is still in a bearish signal, investors should pay attention to the bearish signal of the indicator on the 50 median line.
Wolfe wave: USD/CAD has been fluctuating upward since Monday, forming a clear Wolfe wave pattern. The exchange rate fell after touching the extension of points 1 and 3 yesterday, and has completed the first target. Therefore, there is a probability of reversal in the exchange rate, and attention should be paid to the resistance near 1.38045 above.
Top pattern: The current exchange rate is supported by the level 1.3773 . If the exchange rate falls further below this support price after completing the Wolfe wave. Then this week’s rise will form a top pattern and turn into a false breakthrough, and the exchange rate may then undergo a deep adjustment.
Pivot Indicator
(USDCAD M30 Price Chart, Source: Ultima Markets APP)
According to the Ultima Markets APP, the central price of the day is established at 1.3810,
Bullish Scenario: Bullish sentiment prevails above 1.3810, first target 1.3835, second target 1.3855;
Bearish Outlook: In a bearish scenario below 1.3810, first target 1.3750, second target 1.3730.
Conclusion
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