The USDCAD maintains firm bullish sentiment and broke above strong barriers at 1.2920 (former triple top/2018 high), extending the upleg from 1.2610 (23 Feb trough) into sixth straight day. Canadian dollar remains under increased pressure, driven lower by rising concerns about NAFTA talks which are at their finals, as President Trump characterized it as bad deal for the USA and being overshadowed by US tariffs on imported steel and aluminum.
United States are the biggest market for Canada’s metals, with stronger negative impact to be expected if tariffs will be fully imposed to Canada and NAFTA talks end without desired result. The pair is in uninterrupted ascend from 31 Jan trough at 1.2248 and is riding on the third wave of five-wave sequence from 1.2248.
The wave broke above its FE100% at 1.2880, to validate the wave principles and is eyeing next targets at 1.2981 (FE123.6%) and psychological 1.3000 barrier.
Strong bearish signal was generated on break above lower base/triple-top at 1.2920, with close above it needed to confirm and open way for extension broader recovery phase from 1.2061 (08 Sep low) for further retracement of 1.3793/1.2061 (May-Sep 2017 fall).
Firm break above 1.30 barrier would open way towards next key barriers at 1.3131 (Fibo 61.8% of 1.3793/1.2061) and 1.3146 (FE 161.8% of the wave C from 1.2450 (16 Feb trough). Daily MA’s in full bullish setup, formed several bear-crosses, to further underpin the rally, as momentum continues to trend higher.
A breather in recent strong rally could be anticipated in coming sessions as daily RSI and slow stochastic entered overbought territory, but so far did not create firmer bearish signal.
Res: 1.2981; 1.3000; 1.3044; 1.3146
Sup: 1.2920; 1.2865; 1.2820; 1.2765
