CAD, Aussie and Gold Weekly Update - Feb. 25 close

USDCAD

The Loonie broke the lower descending daily trend line, reaching a 127% reversal on previous swing high, while ending at the weekly lower line of a falling wedge, closing ten pips below 0.9800. Price has continued on the bearish side since this week’s market opening, and I would expect a further push towards 0.9720/0.9700 where we have the next support from February/March 2008, back after a three-year cycle completion. Given the actual dollar weakness we could see new lows on a longer term approach, but at least a retest of support at 0.9000 could be on the lines in the next few months. By now and on a shorter scope, I would see 0.9700 as a good level for a correction and retest of resistance at 0.9800/0/9815 (4-hour chart SMA34 and middle line of the Bollinger bands) and possibly further upside to 0.9850 before resuming the bearish scenario.

 

AUDUSD

The Aussie hinted a break of the upper line of the weekly and daily symmetrical triangles, leaving to expect a continuation of the bullish trend. This week opened with a significant gap down, which has been already filled back and reached above 1.0180 from where it was rejected. However, all the other elements in play makes me think that we will soon be revisiting the all-time highs near 1.0260, or at least we will see an attempt to break the daily previous highs at the round number 1.0200.

Projection for this pair on a medium-term approach is a break of all-time highs and a continuation to next round number 1.0300/30 which is about the top of the daily rising wedge:

However we should exert some caution and keep an eye on fundamentals, as CFTC Net Traders Positions are reported as being at bullish extreme levels and sooner or later those traders will have to book their profits, and this unwinding of the carry trade should lead to a pronounced, fast and violent selling spree. I would be very careful along that 1.0200/1.0300 range and expect a fast and furious bounce back down at either of those levels.

 

XAUUSD (GOLD)

What else can we say about Gold that we haven’t already along the previous weeks? Gold keeps steadily on the rise and just had a week of stubborn consolidation at the 1400.00 level, and the break of this quadruple weekly top is impending. Target still the same at psychological level 1500.00 which, if touched, will most probably lead to further upside after a predictable good correction. Although it is still early to predict the extent of the probable correction after reaching this level, I think we could go back to 1350/60 which has been a strong support in the last quarter of year 2010.