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16 Dec 2015
WTI Crude hasn’t troughed while Gold to see triple digits – BofAML
FXStreet (Delhi) – Research Team at BofAML, suggests that the WTI Crude hasn’t troughed, so $/CAD can’t peak.
Key Quotes
“Multiple time frame projections and indicators suggest lower WTI Crude oil prices and higher USD/CAD. Our short term WTI target of $35.00 is based on a measured move Fibonacci projection. Our intermediate term target of $32.00 is based on a long term market profile chart and historically pivotal ranges. Pending further trend confirmation, $28.00 may be possible. In the event of a counter trend rally, we see resistance at $37.75, $40, a downward sloping 50d SMA currently at $43.50 and 200d at $50.00.”
“USD/CAD prices are expected to rise and initially test the TDST risk level from the monthly chart of 1.39. We are monitoring the possibility of a counter trend trade if USD/CAD trends into the high 1.30’s with less momentum then previous rallies and crude oil reaches a target. Higher levels are not ruled out and include 1.4050 and possibly 1.4830.”
“Gold’s trend is still lower for many reasons. It is trading below the 50% Fibonacci retracement based on the 1999 low to the 2011 high and recently traded at the bottom of a two year channel. It is below all of the key moving averages. Momentum continues to reach oversold in down moves. Many of the past rallies have failed to reach the top of the channel. These are all signs of a downtrend that should continue in 2016. Near term risk: Gold prices recently diverged from momentum suggesting the end of year decline had less momentum than the mid 2015 decline. This is a bullish divergence signal and suggests gold may exhibit some near term strength. We see 1086, 1105 and 1165 as resistance. We recommend selling into strength and target 988 next year.”
Key Quotes
“Multiple time frame projections and indicators suggest lower WTI Crude oil prices and higher USD/CAD. Our short term WTI target of $35.00 is based on a measured move Fibonacci projection. Our intermediate term target of $32.00 is based on a long term market profile chart and historically pivotal ranges. Pending further trend confirmation, $28.00 may be possible. In the event of a counter trend rally, we see resistance at $37.75, $40, a downward sloping 50d SMA currently at $43.50 and 200d at $50.00.”
“USD/CAD prices are expected to rise and initially test the TDST risk level from the monthly chart of 1.39. We are monitoring the possibility of a counter trend trade if USD/CAD trends into the high 1.30’s with less momentum then previous rallies and crude oil reaches a target. Higher levels are not ruled out and include 1.4050 and possibly 1.4830.”
“Gold’s trend is still lower for many reasons. It is trading below the 50% Fibonacci retracement based on the 1999 low to the 2011 high and recently traded at the bottom of a two year channel. It is below all of the key moving averages. Momentum continues to reach oversold in down moves. Many of the past rallies have failed to reach the top of the channel. These are all signs of a downtrend that should continue in 2016. Near term risk: Gold prices recently diverged from momentum suggesting the end of year decline had less momentum than the mid 2015 decline. This is a bullish divergence signal and suggests gold may exhibit some near term strength. We see 1086, 1105 and 1165 as resistance. We recommend selling into strength and target 988 next year.”