Chart of the day: Loonie reversal
After mapping out an irregular five wave broadening top since August, the Canadian dollar's fortunes are suddenly being rethought and we are back to levels last seen in late July. The jury is still out as to whether we have formed an important top to US dollar strength because 1) we remain above the first Fibonacci retracement support at C$1.2865; 2) we are above the lower edge of a steeply rising Ichimoku cloud and 3) the lagging line is above the top of the cloud. On the other hand, moving averages have crossed to bearish and Friday's close is below nearly all of those since the summer, suggesting the pattern is complete. Expect a drop to trend-line support.
Nicole Elliott is a technical analyst