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US Dollar Strengthening Against the GB Pound and Canadian Dollar


Of the major global currencies, the British Pound and Canadian Dollar have displayed a more resilient tone against the US currency since the US Presidential election result.

Most G10 currencies have suffered significant losses against the US Dollar throughout Q4 2016, and particularly since the early November Presidential election outcome.

However, both GBPUSD and USDCAD remain close to pre-election levels, leaving these FX rates within broader range environments.

However, renewed US Dollar gains since the FOMC raised rates on Wednesday 15th December leaves the risk for GBPUSD losses and USDCAD gains into the holiday season and year-end.

GBPUSD

A modest inside pattern bounce Friday to overcome minor resistance, but capped below the 1.2562 level, to leave negative pressures from the break to the downside Wednesday-Thursday and the December topping pattern (Double Top/Head and Shoulders), keeping the risk to the downside Monday.

For Monday:

  • We see a downside bias for 1.2374; break here aims for 1.2359 and maybe key 1.2299.
  • But above 1.2510 opens risk up to 1.2568, maybe 1.2605.

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.

Daily GBPUSD Chart

gbpusd chart

USDCAD

A consolidation Friday above support at 1.3274, to reinforce the strong rally Wednesday-Thursday through resistances at 1.3324 and 1.3357, from just below the trend line from May of this year (from a chart support area now at 1.3077/70), to leave the risk higher Monday.

For Monday:

  • We see an upside bias for 1.3392; break here aims for 1.3417/23 and maybe up to 1.3481.
  • But below 1.3274 opens risk down to 1.3200, maybe 1.3152.

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.

Daily USDCAD Chart

usdcad chart

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