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
EUR/USD
Bearish
Oil - US Crude
Bullish
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
Bearish
GBP/USD
Bearish
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
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/gRjdVfbg66
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/mLLGqYUygY
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/HUYJzEkYiT
  • #Gold prices put in a major breakout last month and, so far, buyers have held the line. But a really big Fed meeting is on the calendar for this week. Can Gold bulls hold? Get your market update from @JStanleyFX here: https://t.co/NGRTSfceOW https://t.co/QkSUORIQE2
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/PHK2sqB1jV
  • Top event risk for more than just the Dow and Dollar this week is the Wednesday #FOMC rate decision. What the markets expect sets the tone for how the event impacts price action. My run down of the week and Fed decision: https://www.dailyfx.com/forex/video/daily_news_report/2021/06/12/Dollar-and-SP-500-Breaks-Must-Abide-the-FOMC-Decision-This-Week.html https://t.co/Huvth4f706
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/AkE7bFRWAt
  • $GBPUSD continues to trade in ranges as volatility dwindles. UK data to play second fiddle to FOMC. Get your market update from @JMcQueenFX here: https://t.co/T0Eg4KaENB https://t.co/GMmZa5L0Il
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here: https://t.co/BgZLFljIhZ https://t.co/wlGgQrcK3X
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCagF5 https://t.co/qnQ8Cx0DKv
Canadian Dollar Forecast: USD/CAD Probing Resistance With Jobs Data on Tap

Canadian Dollar Forecast: USD/CAD Probing Resistance With Jobs Data on Tap

Daniel Moss, Analyst

Canadian Dollar, USD/CAD, Canadian Employment Data, Coronavirus Vaccinations - Talking Points:

  • Equity markets traded broadly mixed during APAC trade despite a strong Wall Street session overnight.
  • Upcoming Canadian jobs data will likely dictate the near-term trajectory of the USD/CAD exchange rate.
  • The formation of a bullish Falling Wedge formation could inspire buyers to drive USD/CAD higher.

Asia-Pacific Recap

Equity markets traded mixed during Asia-Pacific trade after a relatively robust Wall Street session overnight that saw the benchmark S&P 500 climb to fresh record highs, on the back of commentary from Federal Reserve Chair Jerome Powell reiterating the central bank’s accommodative monetary policy stance. Australia’s ASX 200 dipped lower alongside Hong Kong’s Hang Seng Index, while China’s CSI 300 plunged 1.3%.

In FX markets, the Australian Dollar fell after the release of the RBA’s semi-annual report on financial stability, while the haven-associated US Dollar, Japanese Yen and Swiss Franc gained ground against their major counterparts. Gold price traded slightly lower as yields on US 10-year Treasuries jumped 2 basis points higher. Looking ahead, Canadian jobs data and PPI figures out of the US headline the economic docket.

Canadian Dollar Forecast: USD/CAD Probing Resistance With Jobs Data on Tap

DailyFX Economic Calendar

Employment Data to Dictate USD/CAD Trajectory

As mentioned in previous reports, resilient oil prices and the Bank of Canada’s hawkish stance in comparison to the majority of its peers has driven the risk-sensitive Canadian Dollar higher against the haven-associated Japanese Yen and Swiss France for the majority of 2021. However, against its US counterpart, the commodity-linked currency has lost a considerable amount of ground since climbing to its highest levels since early-2018.

These struggles appear to be on the back of the notable divergence in the rate of coronavirus vaccine distribution, and the marked easing of restrictions in the United States. In contrast, with the 7-day moving average tracking infections climbing back above 6,000 for the first time since January, the Canadian province of Ontario has been forced to impose a four-week stay-at-home order, resulting in the closure of all non-essential businesses.

Canadian Dollar Forecast: USD/CAD Probing Resistance With Jobs Data on Tap

Indeed, with only 16.5% of Canadians having received at least one dose of a Covid-19 vaccine, there is the possibility that the local economy may not return to a level of normality as quickly as previously expected. In comparison, 33% of Americans have received at least one shot, with the nation on course to vaccinate 75% of the population – the amount needed to achieve herd immunity – within the next three months.

With that in mind, attention will be intently focused on upcoming jobs figures out of Canada, given the robust non-farm payrolls figures out of the US earlier this month. Disappointing figures would reinforce the divergence in economic fundamentals between the two countries and probably drive the USD/CAD exchange rate higher.

USD/CAD Daily Chart – Falling Wedge Resistance Under Pressure

Canadian Dollar Forecast: USD/CAD Probing Resistance With Jobs Data on Tap

Chart prepared by Daniel Moss, created with Tradingview

From a technical perspective, the outlook for USD/CAD remains relatively bearish, as prices continue to track below all six moving averages.

However, the formation of a bullish Falling Wedge formation suggests that a topside reversal could be on the cards, if buyers can successfully drive the exchange rate back above the trend-defining 55-EMA (1.2628).

This could trigger an impulsive upside move to challenge the March high (1.2737), with a convincing break above bringing the 144-EMA (1.2965) into the crosshairs.

Alternatively, if the 1.2600 handle remains intact, sellers may regain control of the exchange rate and drive prices back towards the yearly low (1.2365).

USD/CAD 4-Hour Chart – Ascending Triangle In Play?

Canadian Dollar Forecast: USD/CAD Probing Resistance With Jobs Data on Tap

Chart prepared by Daniel Moss, created with Tradingview

Zooming into the 4-hour chart also hints at a possible topside break for USD/CAD rates, as prices carve out an Ascending Triangle pattern just below key resistance at 1.2650.

With the RSI eyeing a push back above its neutral midpoint, and price surging away from the sentiment-defining 144-EMA (1.2556), the path of least resistance seems higher.

Remaining constructively positioned above 1.2550 suggests that a test of triangle resistance is likely in the near term, with a break above needed to bring the February 25 high (1.2748) into focus. However, if 1.2550 gives way, a retest of the monthly low (1.2502) could be on the cards.

Canadian Dollar Forecast: USD/CAD Probing Resistance With Jobs Data on Tap

The IG Client Sentiment Report shows 52.07% of traders are net-long with the ratio of traders long to short at 1.09 to 1. The number of traders net-long is 0.43% higher than yesterday and 1.14% lower from last week, while the number of traders net-short is 22.69% higher than yesterday and 5.80% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall.

Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current USD/CAD price trend may soon reverse higher despite the fact traders remain net-long.

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

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

DISCLOSURES