The Canadian Technician

The Loonie Loses Long Term Luster

Greg Schnell

Greg Schnell

Chief Technical Analyst, Osprey Strategic

The currencies continue to tell the story.

$CDW 20130424

This is a meaningful breakdown now. While there is horizontal support at 95 and 93, I am really concerned that the Canadian Loonie will not be able to find support based on what happened to Australia's dollar and other $USD index currencies.

Here is the currency chart I have been posting over the last few months. 

 


Currencies 20130424

 

The currencies are breaking down meaningfully. The Yen collapsed and it is clearly being tested to hold support here. The British pound sits below the green line it broke and looks like a flag pattern before continuing lower. The Canadian Dollar held up better than the Aussie Dollar below it, but they both look extremely sick. The Swiss Franc, the Euro and the Swedish Krona all found resistance at the top green line and are retracing. A zoom in on the Swedish Krona shows it gapping past support and looks extremely weak. We'll see if the Euro gets any power here, but I would suggest it will follow the trend shown on all the other currency charts and let go from here. What this all means is I would expect the $USD will rise dramatically from here over the months ahead. 

Caution is advised!

Good Trading,

Greg Schnell, CMT

 

Greg Schnell
About the author: , CMT, MFTA is Chief Technical Analyst at Osprey Strategic specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More