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
More View more
Real Time News
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/tWwIzXWwj3
  • Further your forex knowledge and gain insights from our expert analysts @ddubrovskyFX and @FxWestwater on JPY with our free Q4 market analysis guide, available for free today.https://t.co/mzeJ5x73N3 https://t.co/lDBYbDLQtZ
  • How does stock market liquidity benefit its traders? Learn more here: https://t.co/FWKyIDUwAw https://t.co/tyoYrsh8mQ
  • 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/4078fnQJON
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/kIIBffEMi7 https://t.co/tt59BU8lnS
  • Quarterly earnings from Netflix and Tesla, two big tech companies, will take center stage next week and could set the trading tone for the S&P 500 and the Nasdaq 100. Get your weekly equities forecast from @DColmanFX here: https://t.co/NOCqjJ3TLd https://t.co/HR5xUZeJXp
  • Do you know the difference between investing and trading? Because while the goal might seem the same, they're very different things . Learn more here.https://t.co/fG6fNEPj9q https://t.co/ymGaYjrl1g
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/FOMcsxci50
  • Further your trading knowledge and gain informed market analyses from our expert analyst @DavidJSong on Oil with our free Q4 guide, available for free today.https://t.co/Y6XECmr5fQ https://t.co/XQI3PN4bkQ
  • Nasdaq 100 may hit new high soon. https://t.co/ACtVqiOBl0
USD/CAD Rate Tracks April Range Ahead of BoC Governor Departure

USD/CAD Rate Tracks April Range Ahead of BoC Governor Departure

David Song, Strategist

Canadian Dollar Talking Points

USD/CAD pares the decline from earlier this month following the limited reaction to the 1.994M decline in Canada Employment, and the exchange rate may continue to track the April range as Bank of Canada (BoC) Governor Stephen Poloz prepares to depart from the central bank.

USD/CAD Rate Tracks April Range Ahead of BoC Governor Departure

USD/CAD approaches the monthly high (1.4173) as it carves a fresh series of higher highs and lows, but the exchange rate may trade within a more defined range in May as BoC Governor Poloz steps down in June.

It remains to be seen if Canada’s Employment report will influence monetary policy as the update showed the biggest decline since the data series began in 1976, and the economic shock from COVID-19 may put pressure on the BoC to implement more non-standard measures as the jobless rate jumps to 13.0% from 7.8% in March.

In turn, the BoC may continue to endorse a dovish forward guidance at its next meeting on June 3 as Deputy Governor Carolyn Wilkins warns that “this situation will cause Canadian gross domestic product to plunge as much as 15 to 30 percent in the second quarter from its level in late 2019,” and the central bank under Tiff Macklem may continue to push monetary policy into uncharted territory as the “Governing Council stands ready to adjust the scale or duration of its programs if necessary.”

With that said, the Canadian Dollar may face headwinds throughout 2020 as the BoC keeps the door open to deploy more unconventional tools, and the broader outlook for USD/CAD remains constructive as the exchange rate breaks out of the descending channel from earlier this year.

However, USD/CAD may consolidate throughout May as the decline from the monthly high (1.4173) stalls ahead of the April low (1.3850), and the exchange rate may trade within a more defined range amid the string of failed attempts to break/close above the 1.4260 (23.6% retracement) region, which sits just below the April high (1.4298).

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 near-term rally in USD/CAD emerged following the failed attempt to break/close belowthe Fibonacci overlap around 1.2950 (78.6% expansion) to 1.2980 (61.8% retracement), with the yearly opening range highlighting a similar dynamic as the exchange rate failed to test the 2019 low (1.2952) during the first full week of January.
  • The shift in USD/CAD behavior may persist in 2020 as the exchange rate breaks out of the range bound price action from the fourth quarter of 2019 and clears the October high (1.3383).
  • However, recent price action warns of range bound conditions as the break of the descending channel formation failed to produce a test of the April high (1.4298), with the recent decline in USD/CAD sputtering ahead of the April low (1.3850).
  • In turn, USD/CAD appears to be on track to test the monthly high (1.4173) as it carves a fresh series of higher highs and lows, with a break/close above the Fibonacci overlap around 1.4130 (100% expansion) to 1.4140 (161.8% expansion) bringing the 1.4260 (23.6% retracement) region on the radar, which sits just below the April high (1.4298).

--- 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