USDCAD: Hurst Cycles - 27th January 2023
With the interim target of 1.33 hit and the next 80 day component trough approaching, we examine the next moves. In addition, we compare with spectral analysis of the similar EURCAD & GBPCAD
Price has, to all intents and purposes, met the 20 week FLD cross target at 1.33 noted in our last report on USDCAD. The excellent signal at the 80 day component has been retained and perhaps has a little more to go, however a move to the further downside target of 1.3 (and the 18 month FLD support) will require a sharp and swift move, very soon.
A comparison between USDCAD, EURCAD and GBPCAD, via time frequency analysis of a time domain average, shows a fascinating picture of divergence at the 40 week nominal component. The 80 day component is largely retained across all pairs and this kind of phase locking is really helpful for us to identify dominance. Divergence is evident around March 2022, whereafter USDCAD outperformed the other two instruments by a large margin. This looks to have been driven by the larger…