RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Starting this analysis with a view of the underlying cash market, the weekly log scale chart below shows today’s break below the entire year’s support around the 1.3015-area and 38.2% retrace of Sep’17 – Dec’18’s major 1.2060 – 1.3665 rally. Precisely one year to today’s date, the CAD has reaffirmed its rally that it started on 31-Dec-18 from that 1.3665 high, exposing a vast chasm devoid of any technical levels of merit.

Moving to a weekly log scale view of the contract, the weekly log chart below shows today’s reaffirmation of a 365-day rally that should not surprise by its continuance or acceleration straight away. But given this market’s position still deep, deep within the middle-half bowels of a massive and lateral FOUR YEAR range, neither should a gross failure to sustain these gains come as a surprise, so identifying tight but objective bull risk parameters is crucial.

What warns of continued and potentially extensive upside vulnerability are the still-depressed levels of bullish sentiment as noted by the Bullish Consensus (marketvane.net) measure of market sentiment/contrary opinion. At a still-historically-bearish 29% level, the fact that this market is achieving new highs for a full year’s rally tells us that the huddled masses still look upon this market with disfavor and may now be forced to catch up, exacerbating the bull.

Drilling down, the daily (above) and 240-min (below) charts show the clear and present and impulsive and impressive uptrend that may not only continue, but may accelerate. Today’s resumed gains leave smaller- and larger-degree corrective lows in their wake at 0.7650 and 0.7590, respectively. These are the levels this market must now fail below to even defer, let alone threaten the bull. Until and unless such weakness is shown, the trend is up on all scales and should not surprise by its continuance or acceleration.

These issues considered, traders are advised to move to a cautious bullish policy and exposure at-the-market (0.7695) with a failure below 0.7650 required to threaten this cal enough to warrant its cover.

RJO Editorial Team