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
EUR/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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • The US Dollar will be bracing for a cascade of political risks including the first presidential debate, ongoing stimulus talks, the Supreme Court vacancy against the backdrop of key employment data. Get your #currencies update from @ZabelinDimitri here: https://t.co/quU4MmUjxA https://t.co/jF6ubwRz1P
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/3wsYlSxd26 https://t.co/PfIVibmqn1
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/lKvEMf4QRe
  • Weakness in equity markets continued last week as losses built and technical patterns hint further bearishness might be ahead. Get your #equities update from @PeterHanksFX here: https://t.co/GGVrB3r7if https://t.co/HPHUC8EG3o
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/q80wSAoxXP
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/7mc19Gxrvm
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/09/26/Gold-Price-Outlook-Rising-US-Dollar-Sinks-XAUUSD-Will-Losses-Extend.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/gPhy0KoW3W
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDnpPbn https://t.co/Xtk5g4JQEB
  • 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/3Wked6GBOp https://t.co/SsUguHB39W
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/aD1ZWhTWZp
CAD Weakness Continues as BoC to Wait-and-See

CAD Weakness Continues as BoC to Wait-and-See

2017-10-25 13:00:00
James Stanley, Strategist
Share:

Talking Points:

- Today at 10AM ET brings the Bank of Canada’s rate decision, and there are minimal expectations for any actual moves. Today’s meeting is all about the policy statement.

- The Canadian Dollar was on a rampage throughout most of the summer, but just days after that second rate hike in September, resistance set in and CAD weakness began to show again. That was seven weeks ago, and CAD weakness continues as USD/CAD has just set a fresh two-month high.

- Want to see how CAD and USD are holding up to the DailyFX Forecasts? Click here for full access.

To receive James Stanley’s Analysis directly via email, please sign up here

Today at 10 AM brings the Bank of Canada rate decision, and there are minimal expectations for any actual moves. The BoC hiked rates in July and again, unexpectedly, in September. The July move was the first rate hike from the bank in over seven years, and this shift from the BoC brought in a fairly aggressive run of strength in the Canadian Dollar that lasted for most of the summer.

But just a couple of days after that September rate hike, CAD sellers began to show-up and have dominated the flow in USD/CAD price action for much of the time since. Prices are now above where they were before that September rate hike, and with a stronger U.S. Dollar combined with little expectation for any further moves from the BoC, prices appear poised to re-test the August highs around 1.2775.

USD/CAD Four-Hour: Fresh Two Month Highs as Summer Swoon Yields to September Bulls

CAD Weakness Continues as BoC to Wait-and-See

Chart prepared by James Stanley

Today’s BoC meeting is all about the policy statement. As discussed by our own David Song earlier this morning, recent commentary from BoC Governor Stephen Poloz suggest a more dovish stance in the near-term along with a more gradual path in normalizing monetary policy. At that September rate hike, Governor Poloz said that “future monetary policy decisions are not predetermined and will be guided by incoming economic data and financial market developments as price growth continues to run below the 2% target.”

Since that September rate hike - Mr. Poloz has said “recent data point clearly to a moderation in the second half of the year,” and this was coupled with the warning that “the story of inflation in Canada over the past few years has been dominated by downside risks.” Collectively, these comments sound as if they’re coming from a Central Banker endorsing a wait-and-see approach with future rate hikes as caution is in abundance around inflation.

On that front of inflation – last week’s Canadian CPI came-in a bit below expectations, printing at 1.6% versus the expected 1.7%. The bulk of this gain, however, came from energy prices and that was largely looked at as CAD-negative as a run of weakness in the Canadian Dollar followed. The more troubling data point from last week came from Canadian retail sales, which absolutely cratered in the month, contracting by -.3% versus the expected .5% gain.

This does not produce an accommodating backdrop for tighter monetary policy, and as we near this morning’s rate decision, CAD sellers are continuing to populate. For those looking to trade bullish continuation in USD/CAD, there are a series of levels that can be usable for near-term approaches. In yesterday’s article, we looked at a long-term Fibonacci level at 1.2672, as it was helping to set resistance. Since then, prices have nudged over this level, and over the past day we’ve seen this price begin to show as support. On the four-hour chart below, we’ve added three resistance levels below the 1.3000 psychological level, and four support levels based on recent price action. Traders can look for a move to resistance to validate further bullish continuation, at which point entry can be afforded by looking to get long at a higher-low around the prior level of resistance (new support).

USD/CAD Four-Hour: Bullish Channel Drives to Fresh Two-Month Highs

CAD Weakness Continues as BoC to Wait-and-See

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES