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USD/CAD Continues to Coil- Aussie Faces Employment Report, China CPI

USD/CAD Continues to Coil- Aussie Faces Employment Report, China CPI

2015-09-09 16:30:00
David Song, Strategist
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Talking Points:

- USD/CAD Range Remains in Play Despite Upbeat BoC.

- AUD/USD Eyes Former Support Ahead of Australia Employment Report, China CPI.

- USDOLLAR Bullish Outlook Remains Favored as Bullish RSI Trigger Takes Shape.

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

USD/CAD

USD/CAD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Even though the long-term outlook for USD/CAD remains bullish, the pair may continue to face range-bounce prices in the days ahead as the Bank of Canada (BoC) retains its current policy and endorses an upbeat outlook for the region.
  • Will keep a close eye on the relationship between oil prices and the Canadian dollar as the BoC continues to measure the impact on the real economy; Relative Strength Index (RSI) is also on the radar as it struggles to preserve the bullish momentum carried over from April.
  • DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short USD/CAD since June 18, but the ratio continues to come off of recent extremes as it narrows to -1.31, with 43% of traders long.

AUD/USD

AUD/USD Daily Chart
  • Downside targets remain favored for AUD/USD as price & RSI retain the bearish formations from earlier this year; will watch former support around 0.7080 (38.2% expansion) to 0.7090 (78.6% retracement) for new resistance, with a break/close above opening up the next key region of interest around 0.7220 (23.6% expansion) to 0.7240 (100% expansion).
  • However, another 5.0K expansion in Australia Employment along with an uptick in China’s Consumer Price Index (CPI) may generate a larger rebound in AUD/USD as it dampens speculation for the Reserve Bank of Australia (RBA) to further embark on its easing cycle.
  • Nevertheless, the next downside target lies around 0.6830 (161.8% expansion) to 0.6860 (61.8% expansion).

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Read More:

Price & Time: USD/CHF - Consolidation Almost Over?

USDCAD Levels to Know Ahead of BoC - 1.3335 Marks Critical Resistance

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

12057.49

12059.14

12019.2

0.25

71.48%

USD/CAD Continues to Coil- Aussie Faces Employment Report, China CPIUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • With the Dow Jones-FXCM U.S. Dollar finally marking a closing price above 12,049 (78.6% retracement), bullish outlook retains favored especially as the RSI breaks out of the downward trend from July.
  • Despite narrowing bets for a September liftoff, language still pointing to a 2015 rate hike may keep the dollar afloat over the near to medium-term amid the growing deviation in the policy outlook.
  • With the USDOLLAR marking a higher-high in September, topside targets are in focus, with the next level of interest coming in around 12,162 (April high) to 12,176 (78.6% expansion).

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USD/CAD Continues to Coil- Aussie Faces Employment Report, China CPI

--- Written by David Song, Currency Analyst

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

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