After a down day in the crude oil and lumber markets, strength in the U.S. Dollar, and an entire session where the Canadian Dollar lost ground against the U.S. Dollar, the USD/CAD seems to have found a near-term intraday top. The uptrend that accelerated throughout the New York trading session has found selling pressure along the range from 1.0249 to 1.0255 (R). The Rising Wedge pattern is now breaking down through 1.0239 (S), revealing that the uptrend may be under some profit-taking as traders and investors sell their long positions after today’s strong move higher. The downside target is waiting at the Forecast area between 1.0217 and 1.0189 (F).
Lumber, which does in fact correlate to the Canadian Dollar (though it may not be the first market that springs to mind) trended lower throughout the session, with prices falling within a Channel Down pattern (resistance was found at 303015 [R], and support at 29100 [S]). Downtrend strength was confirmed by the maximum Initial Trend reading of ten bars, which reflected negativity in the market. The pattern Length reading of 103 candles also emphasized how long intraday bearishness has been hanging around in Lumber. The Lumber market has an inverse correlation to the USD/CAD – like crude oil has – so a downtrending Lumber market contributes to a uptrending USD/CAD, as was the case during Tuesday’s trading session.
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