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. See our updated Privacy Policy here.

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
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
More View more
Real Time News
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/fIO9TP7D62
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/Xja8DHUqlH
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/9po5Lg4vnR
  • The Japanese Yen is eyeing the upcoming Bank of Japan rate decision and CPI figures, but JPY crosses will likely remain dependent on broader market sentiment. Get your weekly $JPY forecast from @FxWestwater here: https://t.co/x9rbQpPfWe https://t.co/2x1R5XTVea
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/uCaWQiu4Ly
  • Crude and Brent oil are on track to extend higher as Gulf Coast supply disruptions and a positive OPEC report bolster sentiment. Uranium is on a massive surge, aided by the famous Wall Street Bets group. Get your market update from @FxWestwater here:https://t.co/XrpV0jcy8e https://t.co/g2To3LmUah
  • RT @michaeljburry: Read thread.
  • The Australian Dollar has retraced from August lows when looking at AUD/JPY and AUD/CAD. However, the AUD/NZD downtrend is intact, will a reversal there appear as well? Find out: https://t.co/8LmgqLLGJO https://t.co/AueigVsuk4
  • The S&P 500, Dow Jones and DAX 30 could be at risk of falling as retail traders continue increasing their upside exposure in these indices. What are the key technical levels to watch for? Find out from @ddubrovskyFX here:https://t.co/OJByiwIppr https://t.co/P1iOONG90N
  • The US Dollar continues to hold its ground against most ASEAN currencies as recent downtrends lose momentum. What is the road ahead for USD/SGD, USD/THB, USD/PHP and USD/IDR? Find out from @ddubrovskyFX here:https://t.co/UcleaZEAaW https://t.co/62bGLvt8fE
USD/CAD at Risk for Larger Rebound on Slowing Core Canada CPI

USD/CAD at Risk for Larger Rebound on Slowing Core Canada CPI

David Song, Shuyang Ren,

- Headline Consumer Price Index (CPI) to Hold Steady at 0.8%- Lowest Since Oct. 2013.

- Core Rate of Inflation to Slow for Second Straight Month to Annualized 2.1%.

For more updates, sign up for David's e-mail distribution list.

Trading the News: Canada Consumer Price Index (CPI)

Despite forecasts for another 0.8% print for Canada’s headline Consumer Price Index (CPI), a slowdown in the core rate of inflation may drag on the loonie and encourage a more bullish outlook for USD/CAD as it raises the Bank of Canada’s (BoC) scope to keep the benchmark interest rate on hold for an extended period of time.

What’s Expected:

USD/CAD CPI

Click Here for the DailyFX Calendar

Why Is This Event Important:

The BoC may carry its current policy into 2016 as it continues to endorse a wait-and-see approach, but positive developments coming out of the region may put increased pressure on the central bank to further normalize monetary policy as Governor Stephen Poloz turns upbeat towards the economy.

Expectations: Bearish Argument/Scenario

Release

Expected

Actual

New Housing Price Index (MoM) (APR)

0.2%

0.1%

Quarterly Gross Domestic Product (Annualized) (1Q)

0.3%

-0.6%

Industrial Product Price (MoM) (APR)

-0.1%

-0.9%

Waning confidence paired with the ongoing weakness in household consumption may encourage U.S. firms to offer discounted prices, and a marked downtick in the CPI may generate a bearish reaction in the greenback as it drags on interest rate expectations.

Risk: Bullish Argument/Scenario

Release

Expected

Actual

Wholesale Trade Sales (MoM) (APR)

0.3%

1.9%

Net Change in Employment (MAY)

10.0K

58.9K

Retail Sales (MoM) (MAR)

0.3%

0.7%

Nevertheless, the expansion in service-based activity along with the pickup in private-sector credit may encourage a sticky inflation print, and a positive development may boost the appeal of the reserve currency as the Fed remains on courses to normalize monetary policy in 2015.

Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!

How To Trade This Event Risk(Video)

Bearish CAD Trade: U.S. Headline & Core CPI Show Greater Risk for Disinflation

  • Need to see green, five-minute candle following the release to consider a long trade on EUR/USD.
  • If market reaction favors a bearish dollar trade, buy EUR/USD with two separate position.
  • Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bullish CAD Trade: Consumer Price Index Exceeds Market Forecast

  • Need red, five-minute candle to favor a short EUR/USD trade.
  • Implement same setup as the bearish dollar trade, just in reverse.

Potential Price Targets For The Release

USD/CAD Daily

USD/CAD Daily Chart

Chart - Created by David Song

  • Downside risks remain for USD/CAD amid the bearish patterns in price & the Relative Strength Index (RSI), but a break of channel resistance may generate range-bound prices over the near-term.
  • DailyFX Speculative Sentiment Index (SSI) shows the retail crowd remains net-short USD/CAD since June 18, with the ratio coming off of extremes to hold at -1.24..
  • Interim Resistance: 1.2360 (38.2% retracement) to 1.2380 (50% retracement)
  • Interim Support: 1.2110 (61.8% retracement) to 1.2130 (23.6% retracement)

Read More:

Price & Time: USD/JPY Still Bullish?

GBP/USD RSI Flirts with Overbought Territory- Retail FX Remains Short

Impact that Canada CPI has had on USD/CAD during the last release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

APR

2015

05/22/2015

12:30 GMT

1.0%

0.8%

+84

+84

April 2015 Canada Consumer Price Index

USD/CAD Chart

Canada’s Consumer Price Index (CPI) unexpectedly slowed to an annualized 0.8% in April to mark the lowest reading since October 2013, while the core rate of inflation also fell short of market estimate as the reading narrowed to 2.3% from 2.4% the month prior. A deeper look at the report showed the slowdown was largely driven by a decline in energy prices along with discounted prices for clothing and footwear. Despite the temporary factors dragging on the economy, it seems as though the Bank of Canada (BoC) will largely retain a neutral policy stance throughout 2015 following the insurance rate cut in January as Governor Stephen Poloz endorses a wait-and-see approach. The Canadian dollar struggled to hold its ground following the disappointing prints, with USD/CAD surging above the 1.2250 region to close the day at 1.2277.

--- Written by David Song, Currency Analyst and Shuyang Ren

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