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US Dollar Broader Range Themes versus Canadian Dollar and GB Pound

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Although the US Dollar retains a positive tone against most global currencies (particularly within G3, against the Euro and Japanese Yen), the US currency has recently seen notable setbacks versus the Canadian Dollar and GB Pound. In fact, the two currencies are amongst the few which are higher against the US currency since the US Presidential election result.

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For USDCAD, losses in December through 1.3262 have produced a short-term topping structure, switching the intermediate-term outlook from bullish to neutral.

Although GBPUSD did see a setback late last week, the GB Pound rebound from November above 1.2674 has shifted the intermediate-term outlook from bearish to neutral.

Although we generally see a stronger US Dollar into year-end, we anticipate erratic consolidation for both USDCAD and GBPUSD for the balance of December.

USDCAD

We shifted our intermediate-term view to neutral from bullish after the push below 1.3262.

Short/ Intermediate-term Range Parameters: We see the range defined by 1.2996 and 1.3588.

Range Breakout Challenge

  • Upside: Above 1.3588 aims higher for 1.3837/59 and 1.4000/17.
  • Downside: Below 1.2996 sees risk lower for 1.2759 and 1.2676/51.

A more gradual decline Friday, but yet another push to the downside,  through the swing low from Thursday at 1.3182, reinforcing the early December topping structure (signalled below 1.3262), to leave risk for still further losses Monday.

For Monday:

  • We see a downside bias for 1.3147 and 1.3138; break here aims down to 1.3080/70.
  • But only above 1.3250 aims for 1.3311 and opens risk up to 1.3357.

Daily USDCAD Chart

 

GBPUSD

Our intermediate-term view is neutral since the push above the key 1.2674 level.

Short/ Intermediate-term Range Parameters: We see the range defined by 1.3121 and 1.2083.

Range Breakout Challenge

  • Upside: Above 1.3121 aims higher for 1.3445 and 1.3534.
  • Downside: Below 1.2083 sees risk lower for 1.1943 and 1.1000.

A low level consolidation Friday after another setback Thursday from ahead of minor resistance at 1.2722 (from 1.2705), to reinforce the mini Head and Shoulders topping pattern, keeping the immediate risk to the downside Monday.

For Monday:

  • We see a downside bias for 1.2505; break here aims for 1.2455 and maybe 1.2418.
  • But above 1.2631 opens risk up to 1.2705.

Daily GBPUSD Chart