19 November 2023 - Thoughts on the Market

In the past month, we have seen quite a number of interesting moves in the markets. The moves have been powerful and spread across many different asset classes. I think it is a good time to assess where we are, where we have come from, and where we are likely heading. Let’s start with a review of some of my prior forecasts.

In prior write-ups, I had called for euro/cad to top out around 1.5100 and head back towards the 1.4200-1.4300 levels prior to re-challenging the 1.5100 highs. The sell-off from 1.5100 ended up stopping around 1.4160 in late September before beginning its next climb. The rally since then has been steady and quite powerful. The euro/cad currency pair has strengthened back above 1.5000 today, and although the cross will almost certainly fail at 1.5100-15200 on this initial attempt, I think there is a good chance that it will take out that level and rally up towards the 1.6000 level. Depending on how the fundamentals play out, I wouldn’t be surprised to see an ultimate rally towards the 1.7500 level, but that will take a long time.