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
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
Oil - US Crude
Mixed
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
Wall Street
Mixed
Gold
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
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Fed's Kaplan says it would be very helpful to have another round of PPP - BBG
  • "EUR/USD Shorts Spike Amid Second Wave & Stimulus Uncertainty" -via @IG_US $EURUSD traders turn more bearish as coronavirus restrictions mount across Europe, but rates could keep rallying thanks to stimulus hopes. Link to Analysis: https://t.co/AGFYjnWtun #FX #Forex #Trading https://t.co/i1Ja3cm10W
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 1.68% 🇳🇿NZD: 1.36% 🇦🇺AUD: 1.10% 🇪🇺EUR: 0.43% 🇨🇭CHF: 0.35% 🇨🇦CAD: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/WZ9WbvQnBM
  • New York virus cases rise above 2k for first time since May - BBG
  • U.K. agrees to continue #Brexit trade talks with the European Union - BBG
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: US 500: -0.05% Germany 30: -0.07% FTSE 100: -0.09% France 40: -0.18% Wall Street: -0.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0y1VU4Ri4I
  • Wowza! What a move by $USDJPY overnight. Selling pressure now subsiding after kissing the zone of confluent support near 104.40 outlined previously. https://t.co/Dc3rbxf73Z https://t.co/m89h5UjOoz
  • Heads Up:💶 ECB Guindos Speech due at 16:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-21
  • US 154-Day Bills Draw 0.115% Primary Dealers Awarded: 46.1% Indirect Bidders Accepted: 40.3% Direct Bidders Accepted: 13.5% B/C Ratio: 3.61
  • Hey traders! Get your Wednesday market update from @JohnKicklighter 👇 https://t.co/9VJzrpgWGv
USD/CAD Weakness to Persist as Bearish Series Takes Shape

USD/CAD Weakness to Persist as Bearish Series Takes Shape

2018-05-31 16:00:00
David Song, Strategist
Share:

CANADIAN DOLLAR TALKING POINTS

The Canadian dollar is back under pressure as updates to the Gross Domestic Product (GDP) report dampen the outlook for growth, and USD/CAD stands at risk of facing range bound prices over the remainder of the week as market participants mull the timing of the next Bank of Canada (BoC) rate-hike. Nevertheless, recent price action suggests the weakness will persist as USD/CAD initiates a fresh series of lower highs & lows, with the pair now at for a larger correction as the BoC alters the outlook for monetary policy.

Image of daily change for major currencies

USD/CAD Weakness to Persist as Bearish Series Takes Shape

Image of daily change for USDCADImage of Canda GDP

The 1.3% expansion in Canada’s growth rate may keep the BoC on the sidelines at the next meeting on July 11 as the figure falls short of expectations, and the central bank may continue to endorse a wait-and-see approach for monetary policy as officials pledge to ‘to assess the economy’s sensitivity to interest rate movements and the evolution of economic capacity.

Keep in mind, the fresh projections from Governor Stephen Poloz and Co. may fuel speculation for another rate-hike in 2018 as ‘higher interest rates will be warranted to keep inflation near target,’ and the BoC may sounds more hawkish in the second-half of the year as ‘inflation in Canada has been close to the 2 per cent target and will likely be a bit higher in the near term than forecast in April.’

In turn, the recent shift in central bank rhetoric may continue to boost the appeal of the Canadian dollar, with USD/CAD now at risk of giving back the advance from the previous month amid the failed attempt to test the 2018-high (1.3125).

USD/CAD Daily Chart

Image of USDCAD daily chart
  • Near-term outlook for USD/CAD remains capped by the Fibonacci overlap around 1.2980 (61.8% retracement) to 1.3030 (50% expansion), with the pair at risk for a larger correction especially as it initiates a fresh series of lower highs & lows, while the Relative Strength Index (RSI) continues to track the bearish formation from earlier this year.
  • Need a break/close below 1.2830 (38.2% retracement) to open up the Fibonacci overlap around 1.2720 (38.2% retracement) to 1.2770 (38.2% expansion).
  • Next region of interest comes in around 1.2620 (50% retracement) followed by the overlap around 1.2440 (23.6% expansion) to 1.2510 (78.6% retracement), which sits just beneath the April-low (1.2527).

Interested in having a broader discussion on current market themes? Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

Image of DailyFX economic calendar

ADDITIONAL TRADING RESOURCES

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES