Wed. Dec 8th, 2021

We are long-term CAD bearers in both USD and JPY. We are seeing a rise in CAD and we see it as a sale to weakness. Below is our view of the basics, techniques, and sentiment:

The trade of reflection that ends CAD is declining

CAD and other commodity currencies skyrocketed in the trade of reflation, as traders opted for a strong global recovery of COVID and increased commodities, risk assets and currencies. . Optimism about global growth in the future is fading and also the rise in risk currencies we see the recent rise in CAD as a good risk to reward sales.

Crude oil and commodities are going down

China, the world’s largest consumer of commodities, is seeing its economy slow down, which will drive down commodity prices. We have also covered crude oil prospects in previous publications and we expect crude oil, which is Canada’s largest commodity export, to continue to fall in the future, which will put pressure on lower CAD.

Risk aversion to increase Safe Haven JPY and USD

The USD seems set for higher long-term prices as the Fed reduces its huge monthly stimulus; this will not only confirm the USD, but will also confirm the JPY as risk aversion increases and the yen becomes the number 1 currency of the safe haven in large movements. to the risk followed by the US dollar, which is the global reserve currency.

Technical analysis

In terms of dollars / CAD on the monthly chart, we are out of the month high, but expect a rise to 1,300 and then to 1.3400. In the daily chart, we are correcting the oversupply condition and we support 1, 0.2700, we would define this level for a long time with a stop behind behind 1.2600.

In terms of CAD / JPY, we have resistance at 88.00 and our bearish targets are 84.00 and 80.00. On the daily chart, we are rising higher and we would come to the level of 87.00 with weakness with a stop behind the important resistance at 88.00. If we fail to test the 87.00 level, we would sell again to the 86.00 level with a stop behind the 87.00 level.

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