Has the Canadian Dollar Price Outlook Given Up On Its Reserve Strength Or Will It Shift To Its Upward Trend?
The Canadian Dollar Price Outlook is a tricky thing because it has been going down as the US Dollar has been rising, but you have to see past the price movements of the past month or so to see if it has actually lost its Reserve Strength.
When the Dollar is moving lower, the Canadian Dollar has to go up, and vice versa.
I like to look at the trend in the USD/CAD ratio in the context of the amount of the USD relative to CAD.
This can be interpreted as having USD/CAD as a positive number when the US Dollar is higher than that ratio, and as a negative number when the Dollar is lower. As the US Dollar moves higher, the CAD goes lower, so I am looking for the CAD to move down from the Current Forecast High and above the next high in line (currently USD/CAD $0.60) and the USD to fall.
I am looking for this pattern at one of the previous three recent base levels. This pattern is shown below, with the X’s representing the MACD entry points. It was near the bottom of this period, and thus was one of the most important periods to have tested the Recent Base Levels.
If you can see the pattern at the same time you are looking at the recent trend, then you will probably have a better view of the patterns I have used to predict the chart direction. If you are not sure what I mean by an additional help, simply look at the chart and then ask yourself what the following two lines would look like if we broke out from the initial break.
The pattern is at the X – the MACD entry point in the USD/CAD chart, and the lines at the two subsequent recent highs (in green) are the two lines connecting to the Current Forecast High. There are two more lines connecting to the current MACD support, which is currently at a reasonable level of resistance.
If we do break out from this cross-over level, there is a chance that the currency will move up, so the horizontal lines may be reversed. If you have your charts open and check the signal for a period of time, you should be able to tell whether the horizontal lines are reversed or not.
For the long term, there is always the possibility that the local currency values could gain enough strength to push the Canadian Dollar Price Outlook even higher. I also suspect that at some point there will be a fundamental change at one of the major exchange rates, which will likely bring about a reverse pattern, which will allow the Dollar Price Outlook to move back down again.
We are likely to see a second correction within the first quarter of this year, where a critical drop occurs, and with it, the likely scenario is that we will move into a correction period before we get to a third and final correction. This was the case in May of 2020, and we did end up seeing the final round of retracement. However, the first quarter of 2020 was a stronger quarter for the Canadian Dollar Price Outlook, so expect a repeat of this pattern with greater strength in the USD.
We would be wise to stay alert to the forecast since the chart pattern itself was the result of a huge volume, which can be seen as such a strong indicator that it is a good indicator for future movements. We should have a series of corrections at the Forecast Retest, but if we do the latter, there is a high probability that we would get to the MACD line break at the same point we would get to if we just hold at the last point, and breakout.
You have to remember that the Forecast Retest occurred at the last two points, so if you were just holding at the last three-month High, you would have had to hold long enough for the final points to pass and that area to reach the respective Trend Resistance and Trend Support lines. lines, and break there. We tend to avoid patterns like this, because it is so much easier to identify a trend line to get inside.