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
Bullish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • The bull flag pattern is a great pattern to add to a forex trader's technical arsenal. Explosive moves are often associated with the bull flag. Learn more about the bull flag pattern here: https://t.co/yOEvLjKnct https://t.co/imv2PnapzH
  • Defensive stocks have proven critically important when navigating stock market volatility. Find out what are the most defensive stocks here:https://t.co/TMcbMALtbw https://t.co/mmldxxEtsc
  • Dollar Index has broken major uptrend support and risks accelerated losses into the December open. Get your $USD technical analysis from @MBForex here:https://t.co/Txo8l8S1f1 https://t.co/YLVzP95JH8
  • The MACD is an indicator that uses exponential moving averages (EMA) to determine trend strength along with entry points based on crossovers. Find out how you can use the MACD as a buy/sell signal here: https://t.co/qxnP99uqTQ https://t.co/tGVqSZ2zK3
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/reMoYpqkQO
  • 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/sqeRL7Rf7u
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/ukOW0dWJxf
  • Beautifully put. https://t.co/0fBsmUH6Pb
  • Gold prices could claw back lost ground ahead of the non-farm payrolls report for November, buoyed by a dovish FOMC, falling real yields and rising inflation expectations. Get your $XAUUSD market update from @DanielGMoss here:https://t.co/3mqut0yQIQ https://t.co/nfyycibwKM
  • 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/UWnLJHVPN4
Strong Employment Report Primes CAD for Bank of Canada

Strong Employment Report Primes CAD for Bank of Canada

2016-04-09 23:43:00
Tyler Yell, CMT, Currency Strategist
Share:
Strong Employment Report Primes CAD for Bank of CanadaStrong Employment Report Primes CAD for Bank of Canada

Fundamental Forecast for CAD: Bullish

The Canadian Dollar has been on a run that likely has more gas in the proverbial tank that could mean further CAD gains. Friday ended last week with an impressive 40,600 jobs gained in March, which also aligned with gainsinWTI Crude Oil, which appears to be on the verge of breakingabove the 200-DMA for the first time since H1 2014.

The latest tally of Canadian Dollar strength against the US Dollar stands as a gain of 1,832 pips as of last week’s low of 1.2856 or ~12.5%. The catalyst for this move was a rate hold by the Bank of Canada on January 20 when a cut was priced in along with future rate cuts because the drop in Oil prices appeared to be wreaking havoc on the economy. However, Bank of Canada governor Stephen Poloz’s confidence in the Canadian economy then may be echoed when they meet on Wednesday.

In addition to Wednesday’s data next week will bring Canadian New Housing Price Index & Manufacturing Sales on Thursday & Friday respectively.They will be in the shadow of Wednesday’s data, but should not be ignored and may be a confirmation on the upswing of Canadian data if either or both data points beat economist’s expectations.

While the Bank of Canada rate decisioncall is expected to be no move, the release of the Monetary Policy Report will likely show the bank is raising their growth forecasts and confidence on the economy’s ability to withstand the 2015 drop in Oil prices.

The apparent developing irony in the Oil market is that we are likely yet to fully grasp the damage done to Oil & gas companies and their respective economies even with the ~60% rise in Oil prices off the February 11 low. There has been a rise in Oil companies defaulting on their debt, and given the debt burden many E&P companies hold, it is near impossible for many firms to borrow their way out of this mess as well as banks have been cutting open lines as well on the price drop. Increased bankruptcies in the industry may lead to volatile jobs reports over 2016 in Canada, butif other sectors can continue to make up for the Energy Industry Job losses,the Canadian Dollar could still havea strong month.

Another component that could lead to the price of USD/CAD falling in addition to Crude Oil gaining is the recent weakness of the US Dollar. Janet Yellen of the Federal Reserve has recently mentioned the US Dollar as a headwind to global growth and therefore, the Fed may ensure that rhetoric appears less US Dollar supportive, which would further push the cause of commodity strength like Gold & Oil in addition to US Dollar counterparts.

Sentiment Analysis Encourages Watching for the Next Big Shift In USD/CAD Positioning

Strong Employment Report Primes CAD for Bank of Canada

The chart above can help you see how sentiment helps you see turns in the market as well as acceleration points. When looking at sentiment,crowd sentiment has moved positiveproviding favor for more downside. Since mid-March, the trend appears to lack acceleration, but if more retail USD/CAD longs join the act, we could see further downside. We use our Speculative Sentiment Index as a contrarian indicator to price action, and the fact thatthe majority of traders are net-long at a bull: bear of 1.22 as 55% of traders are long of traders are long means that a bearish USD/CAD signal is currently at play. As of Friday, long positions are 10.5% higher than yesterday and 8.2% below levels seen last week.

.

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

DISCLOSURES