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
Bearish
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
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
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
Bearish
USD/JPY
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
More View more
Real Time News
  • BOC's Macklem says longer-term bond purchases increases monetary stimulus provided per dollar purchased $USDCAD
  • BOC's Macklem says economic setback could tighten financial conditions significantly $USDCAD
  • BOC's Macklem says purchases of longer-term bonds more effective - BBG
  • We are the cusp of a technical correction (-10% from highs) for the Dow
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.18% 🇨🇭CHF: -0.20% 🇬🇧GBP: -0.48% 🇨🇦CAD: -0.96% 🇳🇿NZD: -1.07% 🇦🇺AUD: -1.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/IihtE4FL0A
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: -2.73% Wall Street: -2.80% FTSE 100: -3.33% France 40: -4.21% Germany 30: -4.40% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/LdaGMmi2NS
  • With the VIX at 40 and a lot of technical breaks across various indices, it's looking pretty ugly out there today I'll be going live in 15 minutes to talk through some of the most important levels and events. Join here - https://t.co/nTpoA2moq4
  • 🇺🇸 EIA Cushing Crude Oil Stocks Change (23/OCT) Actual: -0.422M Previous: 0.975M https://www.dailyfx.com/economic-calendar#2020-10-28
  • 🇺🇸 EIA Distillate Stocks Change (23/OCT) Actual: -4.491M Expected: -2.065M Previous: -3.832M https://www.dailyfx.com/economic-calendar#2020-10-28
  • GBP/USD looks likely to continue to trade around the 1.30 level as the talks between the EU and the UK on their future trade relationship continue.Get your $GBPUSD market update from @MartinSEssex here:https://t.co/cFyXdKJICz https://t.co/Fot9peW4aX
USD/CAD Rate to Take Cues from Bank of Canada (BoC) Forward Guidance

USD/CAD Rate to Take Cues from Bank of Canada (BoC) Forward Guidance

2020-01-21 01:00:00
David Song, Strategist
Share:

Canadian Dollar Talking Points

USD/CAD tracks the range bound price action from the previous week, but the Bank of Canada (BoC) interest rate decision may influence the exchange rate as the central bank remains reluctant to roll back the rate hikes from 2018.

USD/CAD Rate to Take Cues from Bank of Canada (BoC) Forward Guidance

USD/CAD is little changed from the previous week even though the BoC Business Outlook Survey (BOS)“continued to edge up after falling below zero in early 2019, and the exchange rate may continue to consolidate as the BoC is widely expected to retain the current policy at its first meeting for 2020.

Forex for Beginners
Forex for Beginners
Recommended by David Song
Forex for Beginners
Get My Guide

The improvement in business sentiment along with the 35.2K expansion in Canada Employment may encourage the BoC to retain a wait-and-see approach for monetary policy as Governor Stephen Poloz emphasizes that the “labour market has shown a healthy trend over the past year.”

Image of Bank of Canada interest rate decisions

In turn, the BoC may merely attempt to buy time on January 22 as officials “are watching for signs that adverse impacts of trade disputes are being felt beyond the export sectors, but Governor Poloz and Co. may continue to tame speculation for lower interest rates as US lawmakers finally pass the United States-Mexico-Canada Agreement (USMCA).

Little to no indications of a looming rate cut may spark a bullish reaction in the Canadian Dollar as the BoC remains reluctant to reverse the rate hikes from 2018.

With that said, USD/CAD may exhibit a more bearish behavior this year as the exchange rate snaps the range bound price action from the second half of 2019.

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 USD/CAD rate daily chart

Source: Trading View

  • Keep in mind, the USD/CAD rebound from the July low (1.3016) has failed to generate a test of the Fibonacci overlap around 1.3420 (78.6% retracement) to 1.3460 (61.8% retracement), with the exchange rate snapping the range bound price action from the second half of 2019.
  • However, lack of momentum to break/close below the Fibonacci overlap around 1.2950 (78.6% expansion) to 1.2980 (61.8% retracement) has spurred a near-term rebound in USD/CAD, with the monthly opening range raising the scope for a larger recovery in USD/CAD as it fails to test the 2019 low (1.2952) during the first full week of January.
  • The Relative Strength Index (RSI) highlights a similar dynamic as the oscillator bounces back from oversold territory and breaks out of the bearish formation carried over from the previous month.
  • The move above the former support zone around 1.3030 (50% expansion) to 1.3040 (61.8% expansion) has pushed USD/CAD back towards the overlap around 1.3110 (50% expansion) to 1.3130 (61.8% retracement), but the exchange rate may continue to face range bound conditions as it fills the gap from late December.
  • Need a break/close below the Fibonacci overlap around 1.3030 (50% expansion) to 1.3040 (61.8% expansion) to bring the 1.2950 (78.6% expansion) to 1.2980 (61.8% retracement) area back on the radar, with the next region of interest coming in around 1.2830 (38.2% retracement).
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- 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