Long the Loonie

Published on
January 23rd, 2019
9 minutes

Long the Loonie

Trade Ideas ·
Featuring Joseph Perry

Published on: January 23rd, 2019 • Duration: 9 minutes

Joe Perry, CMT, of ForexAnalytix joins Real Vision to update his S&P 500 outlook and to provide a new FX trade on the Canadian dollar. He examines the charts, drills down on the technicals, and discusses key levels to watch out for, in this interview with Justine Underhill. Filmed on January 22, 2019.


  • PB
    Paul B.
    24 January 2019 @ 21:05
    Agree with bearish sentiment that others have stated below. Crude is headed lower in my opinion. Canadian economy is a slow motion train wreck. The largest risk in my opinion is if the US markets continue lower then USD will strengthen as everyone goes to cash. Look at the USDCAD chart in 2008 sell off. I am Canadian as well.
    • fc
      flavio c.
      7 February 2019 @ 19:57
      agree with you
  • JP
    Joseph P. | Contributor
    7 February 2019 @ 02:36
    Closed balance of trade at 1.3225. Total gains +125/+150 pips
  • JP
    Joseph P. | Contributor
    6 February 2019 @ 11:50
    Moving stop to 1.3225
  • AM
    Alonso M.
    24 January 2019 @ 15:14
    I really like the bearishness in the comments section here. Canada has become a contrarian's delight. All the unforced errors the politicians are making makes me think if your time horizon stretches beyond political cycles, then you should be a buyer of the loonie. A weakening WTI, a massively widening WCS differential due to rudderless pipeline regulation, a weakening housing market, a timid Bank of Canada, retails sales headwinds, a horribly indebted consumer, a challenging political hot potatoe with the Meng arrest, and all of this gets us to $0.75? How is this a bearish set up? Some of these negatives are likely to be temporary issues. Maybe the absolute bottom in CAD happens once the debt rating agencies downgrade Canada from its AAA rating. Canada is not a banana republic, so its currency will mean revert against the USD. Long-term this means $0.80-$0.85.
    • MK
      Mike K.
      2 February 2019 @ 19:43
      Yes, wait for the downgrade, and the housing crash shortly after. My timeline, and when you look at previous such moves, would be to give it 2 to 3 years to play out before a rebound. We're in year zero of that. There's much more pain to come IMHO.
  • JP
    Joseph P. | Contributor
    30 January 2019 @ 16:39
    Taking 1/3 off at 1.3200. Moving stop to B/E
  • HS
    Hashem S.
    30 January 2019 @ 07:10
    more tea leave reading
  • OO
    Olga O.
    23 January 2019 @ 18:59
    Like the SPX call but I would disagree on the CAD and energy moving together. The two had ~80% correlation longer term but it has not held in the past 1.5 years. I agree with Mark S. below. Tredeau is killing the energy sector. Sadly it looks like might stay for another term given weak opposition in next year's election. Be careful with this one.
    • DR
      David R.
      23 January 2019 @ 21:35
      Well, his chart shows the USDCAD completing an ABC in wave 2 down. The next wave, 3, in the opposite direction of the impulse (higher) is typically extremely powerful. Which will crush CAD, whether the fool Trudeau is kept on or not. Canada has no friends or markets anymore; Trump loathes Trudeau & Freeland, and now China hates them even more. Canada on the road to economic ruin. Be prepared to SHORT canada.
    • AK
      Arthur K.
      24 January 2019 @ 21:04
      David, you have a currency you dislike more than the dollar... wow.
    • DR
      David R.
      28 January 2019 @ 01:49
      Arthur, I'm not fond of any currency nowadays. It's an issue of which sucks the least. And yes, the greenback isn't the worst however the clueless knee-jerk Fed is terrible but the ECB has been worse and the BOJ is out-of-control. The only virtue of EUR is that it's anti-dollar, but AYK Europe is such a mess the EURUSD could fall anyway. JPY looks weak longer term and if China floats the CNY like the US wants them to, the US will regret it cuz CNY has been overvalued for years and will drop back to 8.3 or worse. There are a few EM FX that are better, but most of all going forward I like my Platinum coins most and expect them to do well this for years soon, and later gold coins too, maybe after one more retest of the lows (or not?). Watch platinum for the lead. BICBW, lol.
  • DP
    25 January 2019 @ 21:11
    Why do most interviewers here have a lisp? is it a prerequisite for the job? lol
  • MA
    Matthew A.
    25 January 2019 @ 20:36
    This trade developed today! spot on!
  • FB
    Floyd B.
    24 January 2019 @ 23:35
    The oil chart is more bullish than I thought which is interesting given the fundamental bears on oil and the CAD economy.Is there a catalyst developing that few understand yet.? I am very interested to see how this comes out.
  • MS
    Mark S.
    23 January 2019 @ 15:38
    I am going to predict this is a brutal call. Trudeau is who he is betting on. See this tweet from a well know economic reporter in Canada in response to Trudeau's nonsense answer. Also Oil hasn't moved with the dollar over the past year because Trudeau has intentionally crippled the oil industry. https://twitter.com/LarryBermanETF/status/1074438383462744065
    • PC
      Peter C.
      23 January 2019 @ 16:18
      Yesterday's Almost Daily Grants also outlined how CAD can get killed. However that doesn't mean in the short term CAD can't go higher to test the boundary of the channel. Great analysis and consistent approach from Joe. Thank you so much.
    • MA
      Matthew A.
      23 January 2019 @ 17:18
      I'm a heavy technical trader and support his call. Oil and CAD dance together all the time. But, our comments are now logged for posterity, 2 months is a position trade I would not take, but I'll swing trade it up and down. See you in 2 month Mark:) I do love these CMT guys/gals, "I have no idea" is comforting from them, when they don't know, they don't know, they have their opinions and wait to see what Mr. Market defines.
    • DR
      David R.
      23 January 2019 @ 21:25
      lol @ canaDUH
    • JM
      John M.
      23 January 2019 @ 22:01
      Quebec would not allow the Energy East pipeline to be built across its province to the Atlantic coast and British Columbia will not allow the Kinder Morgan pipeline (now owned by the federal gov't) to be built across its province to the pacific coast. So Alberta has largely one customer: USA. Our American neighbours can rest assured that they will enjoy cheap Alberta energy for many, many years to come as Canadians continue to shoot themselves in the foot!
    • JM
      John M.
      23 January 2019 @ 23:36
      Yes nice video clip. In the long run he will be a negative for Canada's economy.
  • JO
    Johnny O.
    23 January 2019 @ 22:41
    The SPX recovery has been impressive. I'm also getting hugely divergent information and recommendations (way up versus way down). CAD idea makes sense if you're bearish USD. Oil? I think people get way too excited about heads and shoulders, a tenuous and single data point.
  • JM
    John M.
    23 January 2019 @ 21:52
    I think the probabilities do NOT favour this trade - balance of trade, inflation, interest rate differential, GDP growth, commodity prices (oil??). It is ironic that one of the few pipelines moving forward in Canada these days is the Keystone pipeline (approved by Trump!) Trudeau loves to spend money - he is definitely a risk factor, not an asset! https://www.huffingtonpost.ca/2018/09/18/trudeau-government-spending-2018-summer_a_23527550/
  • MA
    Matthew A.
    23 January 2019 @ 17:13
    you posted the wrong chart when he was breaking down the USDCAD trade...fyi