News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Defensive stocks have proven critically important when navigating stock market volatility. Find out what are the most defensive stocks here:https://t.co/TMcbMALtbw https://t.co/mmldxxEtsc
  • Dollar Index has broken major uptrend support and risks accelerated losses into the December open. Get your $USD technical analysis from @MBForex here:https://t.co/Txo8l8S1f1 https://t.co/YLVzP95JH8
  • The MACD is an indicator that uses exponential moving averages (EMA) to determine trend strength along with entry points based on crossovers. Find out how you can use the MACD as a buy/sell signal here: https://t.co/qxnP99uqTQ https://t.co/tGVqSZ2zK3
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/reMoYpqkQO
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/sqeRL7Rf7u
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/ukOW0dWJxf
  • Beautifully put. https://t.co/0fBsmUH6Pb
  • Gold prices could claw back lost ground ahead of the non-farm payrolls report for November, buoyed by a dovish FOMC, falling real yields and rising inflation expectations. Get your $XAUUSD market update from @DanielGMoss here:https://t.co/3mqut0yQIQ https://t.co/nfyycibwKM
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/UWnLJHVPN4
  • Rather than focusing on earning a specific number of pips per day, traders need to focus on what can be controlled. In trading terms this relates to following a strategy perfectly, with no emotion or hesitation. Learn more here: https://t.co/6ZH026QLRN https://t.co/JJIyKh8r1l
USDCAD Short: BoC Wait on NAFTA Deal to Steepen Rate Path

USDCAD Short: BoC Wait on NAFTA Deal to Steepen Rate Path

2018-09-14 07:00:00
Justin McQueen, Analyst
Share:

USDCAD Trading Strategy: Short on rallies to 1.3060, target 1.28 stop 1.3150

  • Trade Risk: Failure to reach NAFTA deal and soft Canadian inflation

USDCAD Fundamental Overview

CAD: The largest risk to the outlook for the Canadian Dollar is the outcome regarding NAFTA. With a touted deadline of October 1st, the headline risk for USDCAD is high and will turn likely dictate near term price action for the pair. Recent rhetoric has been somewhat positive with source reports signalling that Canada were willing to provide key concessions in order to reach an agreement, consequently the Loonie has firmed in recent trading sessions.

Given the firm data out of Canada, the BoC has signalled that their willingness to raise rates in the short term. Alongside this, recent comments from Deputy Governor Wilkins were on the hawkish side with the rate setter discussing whether to remove its “gradual approach” from its current rate guidance. If indeed an agreement is reached, this could potentially see markets reprice a steeper rate path from the BoC.

On the data front, eyes will be on the upcoming CPI report, in which a a softer figure could cool bets of an aggressive tightening stance and pressure the Loonie.

USD

With Fed tightening price in the markets, the rise in the USD index may be somewhat modest at best from these levels. That said, CFTC data has shown a reduction in USD long positioning over the past two weeks with speculators shedding $2.5bln worth of longs, suggesting that the Dollar could top out. Alongside this, inflationary pressures have seemingly eased following this weeks PPI and CPI releases, which in turn has reigned in expectations of a steeper rate path from the Fed, thus weighing on the greenback.

USDCAD Technical Overview

Resistance 1: 1.3050 (Psychological)

Resistance 2: 1.3115 (23.6% Fibonacci Level)

Resistance 3: 1.3200 (Psychological)

Support 1: 1.2980

Support 2: 1.2950 (38.2% Fibonacci Level)

Support 3: 1.2910 (200DMA)

USDCAD PRICE CHART: Daily Time Frame (January-September 2018)

USDCAD Short: BoC Wait on NAFTA Deal to Steepen Rate Path

Chart by IG

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES