Ed Note: this is a very powerful argument that the Canadian Dollar has finished its selloff against the US Dollar and has likely begun one very long recovery in price. The author covers all aspects from sentiment through to chart patterns in this analysis, and explains why he considers it one of the great opportunities in markets today. Bear in mind that his being Bullish the Canadian Dollar means that he is short the US/CAD contract and the further it falls the more the Canadian Dollar appreciates against the US Dollar. Bear in mind too I shorted last wednesday and remain short the US/CAD myself with a stop at the wednesday’s highs – Editor of Money Talks – Robert Zurrer

Canadian Dollars Are About To Explode Higher

Canadian Dollars have been one of my favorite shorts around the world for a long long time. We are talking about one of the most beautiful bases I’ve ever seen in my career. The old sayings are, “The bigger the base, the higher in space” and, “The bigger the top, the bigger the drop”. I learned these from technical legend Louise Yamada who told me she picked these up from Alan Shaw, retired technician and legend in his own right. In the case of Canadian Dollars, the big top took place between 2009-2013, while the huge base could be seen in USD/CAD but both had the same implications (see base here). All targets have been achieved and now I believe it’s time for a change in direction.

First of all, let’s take a look at USD/CAD from the long-term to get structural perspective. This one is very clear: we’ve run right into the 61.8% Fibonacci retracement of the entire 2002-2007 decline. We kissed this level over the past week and it can be seen in this monthly bar chart:

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