[Calxy]

USD/CAD – The USD is putting short term support at 1.1614 under a little more pressure this morning; daily studies show USD/CAD very overbought and bullish momentum weakening quite markedly in the past few days. We remain of the view that the USD will struggle to do better than the recent highs in the upper 1.16 zone but it remains to be seen just how much downside momentum there is in this market at the moment. A minor double top (1.1680/85 with the trigger at 1.1544) warrants attention (if triggered, it would suggest a run at more important support in the low/mid 1.14s). We still favour selling rallies.

[Calxy]

USD/CAD – The 6-hour chart continues to suggest downside risks for USD/CAD with the potential Head & Shoulders top highlighted last week still on play (breakdown below 1.1555 targets a drop to the upper 1.13s). This chart also shows a sharp sell off in funds earlier this morning likely representing a firm intraday peak at 1.1670 despite a smart bounce in funds through mid-morning North American trade Monday. This is the 14th day with a spot having an open/close with a 1.15 or 1.16 big figure. The flattening out of the June rally in USD/CAD certainly suggests that buying power is fading, something that is reflected more obviously in the longer term charts as well. Daily price action shows spot testing the 11-day MA at 1.1603, which has held on a closing basis on a number of occasions in the past week or so. We still prefer to sell rallies and think the June rally is ripe for a turn lower.

[xiaogang]

USD/CAD – The 6-hour chart continues to suggest downside risks for USD/CAD with the potential Head & Shoulders top highlighted last week still on play (breakdown below 1.1555 targets a drop to the upper 1.13s). This chart also shows a sharp sell off in funds earlier this morning likely representing a firm intraday peak at 1.1670 despite a smart bounce in funds through mid-morning North American trade Monday. This is the 14th day with a spot having an open/close with a 1.15 or 1.16 big figure. The flattening out of the June rally in USD/CAD certainly suggests that buying power is fading, something that is reflected more obviously in the longer term charts as well. Daily price action shows spot testing the 11-day MA at 1.1603, which has held on a closing basis on a number of occasions in the past week or so. We still prefer to sell rallies and think the June rally is ripe for a turn lower.


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[Calxy]

USD/CAD – The Head & Shoulders target (1.1365) noted yesterday has been met – and then some. The five week rally in funds is being rapidly unwound and there is little sign of the move slowing. We note retracement support at 1.1143 (61.8%) and 1.1006 (76.4%) then nothing significant until the high 1.07/low 1.09 range – essentially a retest of the early June low. How quickly we get there is perhaps the issue right now. Obviously, we still favour selling rallies here and we look for good resistance now on modest rebounds back to the 1.1300/50 range; the CAD rally has come on strong very quickly but the break below the base of the rising channel in place since early June suggests a resumption of the medium term slide in USD/CAD and ultimately points to new lows for this move down.