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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • Asian equities update: Topix 1628.60 (+0.41%), Nikkei 225 22548.90 (+0.25%), JPX Nikkei 400 14565.67 (+0.38%). [Delayed]
  • (Asia Pacific AM Briefing) Yen May Fall as Australian Dollar Gains, AUD/JPY Breakout Prolongs #AUD #JPY $AUDJPY - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2019/10/21/Yen-May-Fall-as-Australian-Dollar-Gains-AUDJPY-Breakout-Prolongs.html?CHID=9&QPID=917702 https://t.co/0pCZkTHzTF
  • - How exposed are crude oil prices to weather-induced disruptions? - Flooding, high heat, climate change risks rattling key supply chain - Increased volatility in weather patterns may become a key concern Learn more here ⬇️ https://www.dailyfx.com/forex/fundamental/article/special_report/2019/09/11/How-Crude-Oil-Prices-React-to-Weather-Induced-Disruption-Fears.html?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • RT @business: Will Justin Trudeau win a second term? Or will Conservative Andrew Scheer take power? Follow along with Canada's live electi…
  • RT @Reuters: First polls close in Canadian election that experts say is too close to call. The last polls to close, in British Columbia, wi…
  • RT @NAR: China further opens up financial sector. @tradewar @China https://t.co/ADl2BOvu6Z
  • The $CAD has bounced to test the bounds of a nearly two-year downtrend against the Japanese Yen. Sellers seem likely to regain the upper hand. Get your market update from @IlyaSpivak here: https://t.co/MCsruyOAx5 https://t.co/LIp6f0JPPL
  • #GBP/JPY pivot points (daily) – S3: 137.49, S2: 139.06, S1: 139.91, R1: 141.48, R2: 142.21, R3: 143.79 - https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Australia’s ANZ Roy Morgan Weekly Consumer Confidence Index (OCT 20) Actual:111.6 Est: N/A Previous: 110.9 #AUD
  • $USDCAD has continued its Q4 retreat, pushing down to fresh two-month-lows with the yearly-low now very nearby. Get your USD/CAD technical analysis from @JStanleyFX here: https://t.co/tNd9qQlB2k https://t.co/hRIzBLcXhs
USDCAD: Recent Sell-Off Gives Bulls a New Opportunity

USDCAD: Recent Sell-Off Gives Bulls a New Opportunity

2018-08-01 08:50:00
Nick Cawley, Analyst
Share:

Check out our New Q3 Trading Forecasts: they’re free and include our latest analysis on USD, CAD and Oil – all important drivers of USDCAD.

  • US dollar to get a Hawkish Fed boost.
  • Long-term moving average remains bullish, Fibonacci gives support.

USDCAD Rebound to Take Shape

USDCAD is set to turn higher, driven by US dollar strength and a lull in the price of oil. US Treasury yields provide a solid foundation for the greenback and are set to move even higher over the next few weeks with the FOMC fully expected to hike interest rates, for the third time, by 0.25% at the September meeting. Ahead of that, today’s FOMC meeting will give Fed Chair Jerome Powell an opportunity to underline the strength of the US economy with Q2 growth in excess of 4% while US unemployment remains at a multi-decade low. The 2-year US Treasury currently yields a near-decade high of 2.675%, while the 10-year UST is a couple of basis points under the psychological 3%. Further, renewed trade war fears – and the impact of a slowing global economy - will weigh on the price of oil, an important driver of the Canadian dollar.

USDCAD currently trades around 1.3020, having broken below the 1.3000 level this week, prompting market headlines. The pair however traded straight back above this level which is protected on the downside by the 38.2% Fibonacci retracement level at 1.2952. USDCAD trades just below the 20- and 50-day moving averages but above the long-term 200-day ma, currently at 1.2825. A second level of Fibonacci support, the 50% retracement, sits at 1.2820.

Short-term upside targets are situated between 1.3118 and 1.31365 – 23.6% Fibonacci and 20- and 50-day moving averages. After this the July19-20 double top at 1.3290 comes into view.

USDCAD Daily Price Chart (November 2017 – August 1, 2018)

USDCAD: Recent Sell-Off Gives Bulls a New Opportunity

Entry Point: 1.3020

Target 1: 1.31365 (50-day moving average)

Target 2: 1.3290 (July 19-20 double top)

Stop-Loss: 1.2920 (below 38.2% retracement)

You may like to look at our Free Trading Guides which include Building Confidence in Trading, the Number One Mistake Traders Make and Top Trading Lessons, important pre-trade information.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

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

DISCLOSURES

News & Analysis at your fingertips.