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
Bullish
GBP/USD
Mixed
USD/JPY
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
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
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.89%, while traders in US 500 are at opposite extremes with 80.64%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/HehGdVZjiP
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.06% 🇬🇧GBP: 0.04% 🇪🇺EUR: 0.03% 🇨🇦CAD: -0.02% 🇳🇿NZD: -0.06% 🇦🇺AUD: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/0SmnI3T0hU
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.20% US 500: -0.22% France 40: -0.61% Germany 30: -0.63% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Yj4Ut2iXfP
  • The $AUD seems to be biased lower against its US counterpart despite sellers’ recent struggle to build lasting bearish momentum. Get your AUD/USD market update from @IlyaSpivak here:https://t.co/8yt9QURlhk https://t.co/4zKJtvpEAg
  • The $JPY has posted some rare gains against the US Dollar on its daily chart, but important channel support still holds on an intraday basis. Keep a close eye on it now. Get your market update from @DavidCottleFX here:https://t.co/ReMGzu6OjP https://t.co/3ZYnOKnDp5
  • 🇯🇵 JPY All Industry Activity Index (MoM) (SEP), Actual: 1.5% Expected: 1.5% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2019-11-21
  • Heads up: Japan’s All Industry Activity Index (MoM) (SEP) is due at 4:30 GMT (15 min) Est: 1.5% Previous: 0.0% #JPY
  • Heads Up:🇯🇵 JPY All Industry Activity Index (MoM) (SEP) due at 04:30 GMT (15min), Actual: N/A Expected: 1.5% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2019-11-21
  • Inconclusive #UK #Brexit #ElectionDebate hasn't done much for overall polling which has #Conservatives ahead. GBP markets would probably like to see #BorisJohnson 's party win, if only as he offers at least some prospect of forward Brexit movement. #GBPUSD https://www.dailyfx.com/forex/fundamental/article/special_report/2019/11/21/GBP-Holds-Up-After-Close-Brexit-Debate-Bulls-Watch-Tory-Poll-Lead-.html?utm_source=Twitter&utm_medium=Cottle&utm_campaign=twr
  • RT @Reuters: Yen gains, yuan down as trade woes, Hong Kong strife sap risk appetite https://t.co/jOyql6g1Mr https://t.co/Biqp6upcTX
USD/CAD to Resume Bearish Trend on Strong Canada CPI Report

USD/CAD to Resume Bearish Trend on Strong Canada CPI Report

2014-07-17 17:00:00
David Song, Currency Strategist
Share:

- Canada Headline Inflation to Hold at 2.3%- Fastest Pace of growth Since 2012.

- Core Consumer Price Index to Expand 1.7% for Second Straight Month.

Trading the News: Canada Consumer Price Index (CPI)

Canada’s Consumer Price Index (CPI) may generate a key turn in the USD/CAD as heightening price pressures puts increased pressure on the Bank of Canada (BoC) to adopt a more hawkish tone for monetary policy.

What’s Expected:

USD/CAD to Resume Bearish Trend on Strong Canada CPI ReportUSD/CAD CPI

Click Here for the DailyFX Calendar

Why Is This Event Important:

Even though BoC Governor Stephen Poloz talked down the risk for inflation, sticky prices in Canada may continue to prop up interest rate expectations as the central bank adopts a more balanced view for the economy.

For LIVE SSI Updates Ahead of Canada’s Inflation Report, Join DailyFX on Demand

Expectations: Bullish Argument/Scenario

Release

Expected

Actual

Manufacturing Sales (MoM) (MAY)

1.0%

1.6%

Building Permits (MoM) (MAY)

2.0%

13.8%

Retail Sales (MoM) (APR)

0.6%

1.1%

The pickup in private sector consumption may encourage faster price growth in Canada as the BoC looks to achieve a ‘soft landing’ in the housing market, and a stronger-than-expected CPI print may spur a more material shift in the policy outlook as the central bank softens its dovish tune.

Risk: Bearish Argument/Scenario

Release

Expected

Actual

Net Change in Employment (JUN)

20.0K

-9.4K

Business Outlook Future Sales (2Q)

30.00

24.00

Gross Domestic Product (MoM) (APR)

0.2%

0.1%

Nevertheless, the ongoing slack in the real economy may continue to dampen the outlook for inflation, and an unexpected slowdown in price growth may generate a further advance in the USD/CAD as it drags on interest rate expectations.

How To Trade This Event Risk(Video)

Bullish CAD Trade: Canada CPI Rises an Annulized 2.3% or Higher

  • Need red, five-minute candle following the CPI report to consider short USD/CAD entry
  • If the market reaction favors a bullish Canadian dollar trade, establish short with two position
  • Set stop at the near-by swing high/reasonable distance from cost; use at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish CAD Trade: Headline Reading for Inflation Disappoints

  • Need green, five-minute candle following the release to look at a long USD/CAD trade
  • Carry out the same setup as the bullish loonie trade, just in the opposite direction

Potential Price Targets For The Release

USD/CAD Daily

USD/CAD Daily

Chart - Created Using FXCM Marketscope 2.0

  • Despite bullish break in RSI, downside remains favored given series of lower highs & lows.
  • Interim Resistance: 1.0820 (61.8% retracement) to 1.0850 (38.2% retracement)
  • Interim Support: 1.0580 (61.8% retracement) to 1.0600 (61.8% retracement)

Read More:Price & Time: Several Major Exchange Rates At Pivotal Levels

Gold Gains As Geopolitical Tensions Intensify, Crude Recovery At Risk

Impact that the Canada CPI report has had on CAD during the last month

Period

Data Released

Survey

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

MAY

2014

06/20/2014 12:30 GMT

2.0%

2.3%

-55

-63

May 2014 Canada Consumer Price Index (CPI)

USD/CAD to Resume Bearish Trend on Strong Canada CPI Report

The headline reading for Canada inflation climbed to an annualized 2.3% in May to mark the fastest pace of growth since February 2011, while the core CPI increased 1.7% during the same period amid forecasts for a 1.5% print. The stronger-than-expected prints spurred a bullish reaction in the Canadian dollar, with the USD/CAD slipping below the 1.0800 handle, and the pair traded lower throughout the North American trade as the pair ended the day at 1.0751.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

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

DISCLOSURES

News & Analysis at your fingertips.