CAD establishing a macro-bull market

September 19, 2017 11:38 AM

The critical “near-term question” has become—“Did the monthly price bar for September peak on Friday 9-08-17 at 0.082925 in the December contract?”

If so, the monthly upward thrusts, following the support found during the correction in August, would appear to have shortened. If the monthly price bar has shortened or is shortening, the result could/should indicate that the rally, following the low in May 2017, a retest and higher support to the January 2016 low, has peaked or is peaking. 

At this monthly mid-point, the trader/analyst does not know, for sure, if the “monthly upward thrust” for September 2017 has or will shorten because the month is not over. Therefore, while looking for indications, from forthcoming price action, the trader/analyst should be concentrating more of his attention on the shorter term time frames, which are found on the weekly, daily and intra-day charts, to determine, as soon as possible, whether forthcoming “shorter-term price action [additional information/price action]” is having a potentially intra-month negative impact, which may change the final shape of the quarterly and monthly price bar for September 2017, which is now using the December contract to complete the quarterly price bar. 

Canadian dollar weekly

Weekly price action for the week ending on Friday 9-15-17 has been questionable, but nonetheless, weekly price action has been inconclusive about its immediate contribution toward determining whether the “monthly price bar for September” is narrowing/shortening its upward thrusts. Therefore, the conclusion about results, from weekly/daily price action, within the forthcoming two weeks of trading, remaining in September and the 3rd quarter, remain fluid. Nonetheless, additional weekly price weakness could/should become problematic, at least in the “intermediate term,” if forthcoming price action starts to accomplish too much in downside results, which ultimately affects the final shape of the monthly price bar for September, and subsequently, the shape of the price bar for the 3rd quarter of 2017. 

Just as importantly, a poor weekly/daily rally, to new monthly highs, which, nonetheless, shortened the upward weekly thrusts, within the larger monthly upward thrust, even if recording a new monthly high, could also become problematic. Clearly, an “inflection point,” containing important price action [information], for sustaining or ending the uptrend, which followed the support established at the low on August 15, 2017, is in progress.

Canadian dollar daily

After finding short term intra-day and daily support, during the 7 a.m. hourly price bar, on Thursday 9-14-17, prices made an initial early morning attempt to continue the upside effort on Friday 9-15-17. The release of a weaker than expected Retail Sales number at 7:30 a.m. caused a new morning high, in a “fast market,” which resulted in an early morning reversal downward.  Subsequently, prices declined on increased volume for most of the remaining day.  Nonetheless, Friday’s daily price action did hold and close above Thursday’s low. 

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About the Author

Robert Burgess has been a broker and trader, and published the Burgess Technical View, a newsletter featuring his technical views on stocks, bonds and commodities, which developed an extensive subscribership, which included large financial institutions, pension funds, and Fortune 500 companies.  He continues to keep a watchful eye on markets.