The Canadian dollar futures (CME.CD) recorded its second successive decline on Thursday, dropping 1.1% to close at $98.22. Both declines came on 'trend day' down patterns, where the open was in the upper 20% of the day's intra-day range while the close was in the lower 20%. Will the Loonie rebound from the dip?
Q: How has the Canadian dollar performed in the past, omitting repeat occurrences within 10 trading days, when it records two successive 'trend day' down declines during the second quarter?
A: According to the 9 previous occurrences of this event, EventEdge indicates that CME.CD has shown a strong bullish edge that peaks six trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, May 8, 2008) is Friday, May 16, 2008.
The Loonie rallies in 100% of the cases (9 of 9) by an average of 0.6% relative to the close on the event date. Which, based on the close of CME.CD on the event date ($98.22), provides a target price of $98.81.
To view this idea in our EventEdge® analysis tool click here.
Ronish Patel is an analyst with MarketHistory.com.