Wednesday, September 28, 2016

Oil Producers' Meeting in Algiers; of what effect to CAD?

Oil Producers Meeting in Algiers

One of the fundamental highlights of the week is the informal meeting that will be held today by oil producers (OPEC and Non-OPEC members) in Algiers today.

Though the meeting is an informal one, the outcome will definitely have a short term effect on Oil prices and of course, CAD. The prices of oil have immediate effect on the CAD.

During the meeting, there will be private talks and rumours which will have significant effect on oil prices.

All eyes will be on Iran and Saudi Arabia who have been raising production. The stance of these two oil giants will be very important.

According to reports, if one of these giants cut, the other may follow; so the agreement between these two will be one of the major highlights.

Formal meetings will be be held by OPEC if an agreement is reached and this will increase the Oil price in the short term. A disagreement will mean that price will spike southward in the short term as markets spikes based on rumours.

What effect would this have on CAD and how do we take advantage of an sudden change in price that such meeting brings?


 We have been following this currency pair for a while now and yesterday we expected a rally to 78.5
but Poloz's negative statement about the CAD brought price down.

According to the chart above, there was a 5-wave decline after the end of a larger corrective move. A correction to 78.5 will be seen if the Oil producers have a positive meeting in Algiers. A break above 76.74 will confirm the short term bullish move of this pair.

At every point in time, we must always prepare for eventualities and what technical tool helps us more than the Elliott wave theory?

We have an alternative view. If the talk in Algiers ends up negative,CAD will fall in the short term.
This means that the sub-wave (v) which was presumed to end at 75.32 may extend below

A  break below 75.42 could mean that price will fall further to around 73.4 as the little push (ii in blue) may just be a mere retracement to Poloz's southward spike.

What does this mean for us if I can recommend?


*Buy Cadjpy at 76.75, minimum target at 78.5 and Stop loss at 75.4

*Sell Cadjpy at 75.4, minimum target at 73.4 Stop loss (where wave(ii) in blue ends)

Note: These parameters can change as price moves and we can adjust them based on position of price before the awaited moves.

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*Disclaimer: This is not a call to trade. Traders take this at their own risk. We will not be responsible for any loss suffered or profit gained. Apply due dilligence.


In our last updates , we have two scenarios for Usdcad : bullish and bearish. The target for reversal at the top was at 1.33 which price didn't hit before a sharp downside move.

We have two outlook based on what the outcome of the meeting is.

If the outcome for the meeting is good for CAD, we might see a sharp corrective move downside though there are high volatile news coming for USD today as well so we will see price in high speed movement. I will look forward for a bullish position if price 'correctively' dips to 1.3065.

Incase of a rally the chart below shows that a move to 1.3432 is likely if price breaks above 1.3280

 Usdcad may be the most volatile today together with the Eurusd.

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