First, and foremost, we’re traders here at Trader Skillset. We don’t need stories, or narratives, about our trades – we use technical analysis. But, sometimes, if you get stories that back up your analysis, your conviction on a trade may lead to larger wins. Such as in USDCAD.
We mentioned our USDCAD target of 1.1985 back in September, when it traded below 1.09. The chart we posted is below:
And, again we highlighted bullish USDCAD in CAD in Trouble – The Wolf’s Prey Currency Review on September 20. The first time we mentioned the commodity declines as a likely reason for CAD weakness was on November 2nd, “We’ve seen substantially weakness in many commodities that Canada produces, so is there a housing bust looming post-commodity decline?”
The Bank of Canada has now lowered rates in an attempt to offset the weakness in the Canadian economy on the back of the commodity decline. And, that commodity decline is having an increased impact on other sectors of the economy, as witnessed in the GasFrac, Southern Pacific Resource, Mexx and Target Canada bankruptcies.
Those bankruptcies lead right into another theme we think is going to be huge in 2015, and that’s companies declaring bankruptcy and defaulting on loans. Stay tuned to our Junk Bond Bubble Dosimeter (which is up to 49!) for ongoing updates and our weekly Wolf’s Prey Elliott wave currency review, which will be going to two updates per week soon.
The time zone we reference on our charts is Pacific Standard Time. Therefore, the U.S. cash market opens at 6:30 AM PST and closes at 1:00 PM PST.