Canadian Dollar Cycle Degree Review

Our Canadian Dollar created a beautiful spike in Late 2007, just a bit before crude oil peaked in 2008 about 6-7 months later.  As we can see that the 2007 peak has never been exceeded. We can also see how violent these leveraged asset classes can behave.   The season contrarians saw the 2008 CAD crash coming, so it was not a surprise to a few of US.  The vocal majority of analysts were overwhelmingly bullish in late 2007,  as they thought our CAD would keep going up with oil. After all, oil was heading into $200 at that time. Right? 😎

By early 2016 the CAD created a spike to the downside after which it started to rally again.  Lately the CAD has corrected, but it sure looks like an expanded pattern may have played out as well. To help confirm that the CAD correction is over then, another leg up should happen.  Analysts love to connect our CAD to oil, but that may just be a simple explanation, that they use over and over again. 

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