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
GBP/USD
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
More View more
Real Time News
  • USD/MXN drops back into its recent range as investors await further guidance from economic data. Get your weekly Mexican Peso forecast from @HathornSabin here: https://t.co/reMgPrFGdF https://t.co/dl6gomcFxF
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0uF2Ct https://t.co/KS13JNwlvL
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/bxQ8s8eGjR
  • Australian Dollar plunged for a fifth week but held key downtrend support at the yearly lows. Get your weekly AUD technical forecast from @MBForex here: https://t.co/uyUWYQoYS7 https://t.co/BXid10FYD1
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/eReyYRYOn1
  • Last week’s march higher in EUR/USD may well extend further after Friday’s Eurozone economic statistics that will likely turn the ECB more hawkish on monetary policy. Get your weekly Euro forecast from @MartinSEssex here: https://t.co/EWrJy5LfOF https://t.co/NQj5xCdw9b
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here: https://t.co/nAa0fHHGbZ https://t.co/uDeIMr1Ks4
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/srqRhfdKUd
  • Cable is pulling off after a strong run; near-term weakness may be the theme before trying to rally again. Get your weekly GBP technical forecast from @PaulRobinsonFX here: https://t.co/030gXzxlEc https://t.co/ux7W6OcBOm
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sZLTs https://t.co/FPKAoLQuuI
USDCAD Rebound Unravels Ahead of Fed Symposium Amid Sticky Canada CPI

USDCAD Rebound Unravels Ahead of Fed Symposium Amid Sticky Canada CPI

David Song, Strategist

Canadian Dollar Talking Points

USDCAD consolidates ahead of the Kansas City Fed Economic Symposium in Jackson Hole, Wyoming, and the advance from the August-low (1.3178) may continue to unravel as the Federal Open Market Committee (FOMC) comes under pressure to implement a rate easing cycle.

USDCAD Rebound Unravels Ahead of Fed Symposium Amid Sticky Canada CPI

USDCAD pullbacks from a fresh monthly-high (1.3346) as Canada’s Consumer Price Index (CPI) comes in stronger-than-expected in July, with the headline reading for inflation holding steady at 2.0% for the second consecutive month.

Signs of sticky price growth should keep the Bank of Canada (BoC) on the sidelines as “growth in the second quarter appears to be stronger than predicted,” and Governor Stephen Poloz and Co. may continue to endorse a wait-and-see approach at the next meeting on September 4 as “recent data show the Canadian economy is returning to potential growth.

In contrast, the FOMC is likely to face a different fate as President Donald Trump tweets that “the only problem we have is Jay Powell and the Fed,” and the central bank may come under increased pressure to reverse the four rate hikes from 2018 as the shift in trade policy clouds the outlook for the US economy.

In turn, the Federal Reserve may continue to alter the forward guidance for monetary policy, but it remains to be seen if Chairman Jerome Powell will make a major announcementahead of the next interest rate decision on September 18 as the central bank head is scheduled to deliver a speech at the economic symposium.

Image of Fed Fund futures

With that said, a batch of dovish comments is likely to produce headwinds for the US Dollar, with USDCAD at risk of exhibiting a more bearish behavior over the remainder of the month as Fed Fund futures still reflect overwhelming expectations for another 25bp rate cut in September.

However, recent comments from Boston Fed President Eric Rosengren, a 2019-voting member on the FOMC, suggest there’s a rift within the central bank, and a growing number of Fed officials may resist calls to implement a rate easing cycle as the US economy shows little evidence of a looming recession.

With that said, remarks coming out of the Fed symposium may sway the near-term outlook for USDCAD, but the advance from the August-low (1.3178) may continue to unravel amid the diverging paths for monetary policy.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

USD/CAD Rate Daily Chart

Image of usdcad daily chart

Source: Trading View

  • Keep in mind, the broader outlook for USDCAD is no longer constructive as the exchange rate clears the February-low (1.3068), with the break of trendline support raising the risk for a further decline in the exchange rate.
  • At the same time, the rebound from the 2019-low (1.3016) remains capped by the 1.3280 (23.6% expansion) to 1.3330 (38.2% retracement) region, with the string of failed attempt to close above the Fibonacci overlap raising the risk for a further decline in the exchange rate.
  • Need a break/close below 1.3220 (50% retracement) to bring the downside targets back on the radar, with the first area of interest coming in around 1.3120 (61.8% retracement) to 1.3130 (61.0% retracement).
  • Will keep a close eye on the Relative Strength Index (RSI) as the indicator still tracks the upward trend from July, but the failed attempt to push into overbought territory may send the oscillator towards trendline support, with a break of the formation offering a bearish signal.

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 2019.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES