First let’s take a look at the fundamentals of all major currency pairs for the coming days. Various sources suggest Inflation in G7 could hit the Great Depression low in 1932. Every country in the G7 is now below 2% with only Japan on an upward trend. Continuing with the theme of japan, BoJ Minutes have showed QE cycle may continue for far more than 2 years. The BoJ, with this in mind has vowed to boost inflation to stable 2% in “about two years”. Today Canada will have a busy day with CPI and retail sales data which could cause some sexy movements on the dance floor. And therefore the pick of the day is the Loonie, forex geek name for Canadian dollar.
First scenario is if the market reaction favors an upside USD/CAD movement. Right now the pair is passionately testing the resistance level at 1.12 area, a price level the pair hadn’t touched since 2009. A break above this level could open doors for more gains towards the 1.16 area.
On the other hand, [IMG 2] the pair may form a double top pattern at the resistance level, and change direction. In that case, our bearish targets will be the Fibonacci levels at 1.09571, 1.08188 and 1.07019.
Stay tuned for more updates and if you feel like you’re lost in translation with this report, come one over to InvestDiva.com and check out our straightforward and easy education program.