Even though the commercial hedgers are net long the Canadian Dollar by a 2:1 ratio, I will keep working our CAD with a bearish outlook. When the Canadian dollar hit its peak in 2011 its price was repelled to the downside with the first peak in solar cycle 24. Many other commodities also imploded notably all gold related assets.
This provided the push to the 2016 bottom, after which the CAD exploded violently. Not just once but twice with the same looking pattern.
This all can be taken as a bullish sign, but I see an inverted zigzag which has not completed. From the 2017 peak, the CAD has declined with overlapping waves, which helps in thinking we are in a 5th wave decline.
To help confirm that the CAD is still in a bear market rally, the 73 cent price level will not hold, and at best we will get a huge double bottom at the 68 cent price level. This may take until late 2020 to play out but by then we could see the arrival of solar cycle 25.
The world is in a war against the use of fossil fuels, the likes we have never experienced before. In the last 2-3 years, the language has changed to the “War On Climate Change”. Global warming wording has disappeared from mainstream media headlines, replaced by just “Climate Change”.
The world is all in a panic to stop the climate from changing, which is actually a war on our sun! Good luck with that folks, as I have never seen anyone win betting against the sun.
We may still get a bullish push with the CAD but in the near term, support will not hold.