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
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/H19vRDCpUJ https://t.co/S74APOiQ3y
  • Two of the main Euro-pairs, $EURUSD and $EURGBP, are being driven by very different drivers. Get your market update from @nickcawley1 here: https://t.co/Vd32Y6HKEr https://t.co/Lgb5z5V1Xa
  • 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/9uPXNvDBS5
  • We ended this past week with another cliffhanger. The $SPX teeters on the edge of a breakdown from the post-pandemic recovery. While we have NFPs and other key data ahead, the markets are likely to remain fixated on yields. My outlook for next week: https://www.dailyfx.com/forex/video/daily_news_report/2021/02/27/SP-500-Dollar-Reversal-Hinge-Not-On-NFPs-but-Markets-Risk-Imagination.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/mlNDDyTgex
  • Make smart trading decisions with your free guide to trade the news. Download your free guide here.https://t.co/pb5E2KgRzW #DailyFXGuides https://t.co/70ZOJ0ZMwF
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/SyroornFf5
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4QhQGQ6 https://t.co/KrMcyZZqO7
  • The Reserve Bank of Australia (RBA) rate decision may spark a bullish reaction in $AUDUSD as the central bank is expected to retain the current course for monetary policy. Get your market update from @DavidJSong here: https://t.co/WbcR9ER0qT https://t.co/TynsqCtPQ6
  • Gold has broken below a critical support confluence we’ve been tracking for months now and the risk remains for further losses while below this threshold in the weeks ahead. Get your $XAUUSD market update from @MBForex here:https://t.co/xgN2obaIWR https://t.co/H71ufPNkPg
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/Evr5KgUjVo
USD/CAD Price Outlook Ahead of Bank of Canada Rate Decision

USD/CAD Price Outlook Ahead of Bank of Canada Rate Decision

Rich Dvorak, Analyst

SEPTEMBER BOC MEETING & CANADIAN DOLLAR PRICE OUTLOOK:

  • Canadian Dollar price action has whipsawed in the run-up to the September BOC meeting
  • The Bank of Canada is expected to leave its key interest rate unchanged, but traders will likely scrutinize updated remarks on monetary policy outlook from BoC Governor Poloz
  • Join DailyFX for free live webinar coverage of the September Bank of Canada Interest Rate Decision hosted by Senior Currency Strategist Christopher Vecchio, CFA

The September BOC meeting is expected to reveal no change to the central bank’s benchmark interest rate, which currently stands at 1.75%. Looking further out, however, we see the Bank of Canada rate cut probability grows exponentially to a 75% chance by its December meeting according to overnight swaps pricing. That said, Canadian Dollar price action will likely respond to details found within the BOC’s updated monetary policy statement and accompanying commentary from Governor Poloz.

BOC – BANK OF CANADA INTEREST RATE CUT PROBABILITIES

BOC Bank of Canada Rate Cut Probability Chart

Most prominently, markets will likely look for any signs of a shift in the BOC’s policy stance toward a more dovish tone in lieu of its current relatively hawkish position. The heavy weight currency traders are placing on the September BOC meeting could be explained by recent economic data painting a mixed depiction of the Canadian economy, which has made the market’s expectations of future BOC monetary policy decisions increasingly ambiguous. Consequently, the loonie has whipsawed around looming event risk despite technicals suggesting the Canadian Dollar appeared ripe for a breakout.

CANADA ECONOMIC SURPRISE INDEX (CITI)

Canada Economic Surprise Index Price Chart

Canadian economic data has improved considerably throughout August according to the Citi economic surprise index, but details behind the headline indicators appear less sanguine. On the bright side, Canadian inflation and retail sales have held up quite well. Conversely, the July jobs data printed a huge miss and could convey signs of weakness emerging across Canada’s labor market. Also, while Q2 Canada GDP data came in better than expected, looking “under the hood” of the report uncovered a notabledrop in business investment and uninspiring slowdown in household spending.

CANADIAN DOLLAR IMPLIED VOLATILITY & TRADING RANGES

Canadian Dollar Price Chart Implied Volatility Trading Ranges Ahead of September BOC Meeting

As such, Canadian Dollar overnight implied volatility has jumped ahead of the September BOC meeting with the readings on USDCAD, CADJPY, EURCAD, GBPCAD and AUDCAD all above their 12-month averages. GBPCAD is expected to be the most volatile CAD-pair in light of heightened Brexit risk with CADJPY behind as a close second owing to the potential impact BOC monetary policy changes could have on JPY-funded carry trades.

USDCAD PRICE CHART: DAILY TIME FRAME (APRIL 08, 2019 TO SEPTEMBER 03, 2019)

USDCAD Price Chart Technical Analysis September BOC Meeting Forecast

Judging by USDCAD overnight implied volatility of 6.27%, spot prices are estimated to trade between 1.3462-1.3419 with a 68% statistical probability. A dovish shift by the BOC tomorrow, if confirmed, will likely push spot USDCAD toward major confluence around the 1.34 handle and above technical resistance posted by the 61.8% Fibonacci retracement level of its May 31 swing high.

Alternatively, a firm stance reiterated by the Bank of Canada stands to send spot USDCAD whipsawing back lower where prices may find technical support around the 1.3300 area before testing the lower bound of its option-implied trading range. Also, bullish uptrend support extended from the series of higher lows since mid-July could also help keep spot USDCAD afloat going forward.

USDCAD – IG CLIENT SENTIMENT INDEX PRICE CHART: DAILY TIME FRAME (MARCH 07, 2019 TO AUGUST 03, 2019)

USDCAD Price Chart

According to IG Client Sentiment data, 31.2% of spot USDCAD retail forex traders are net-long resulting in a short-to-long ratio of -2.21 to 1. Interestingly, traders have remained net-short since Jul 23 when USDCAD traded near 1.30435; price has moved 2.5% higher since then. Also, the number of traders net-long is 12.5% lower from last week whereas the number of net-shorts is 2.8% higher over the same period, which gives our bearish contrarian view to crowd sentiment further credence.

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES