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.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Bearish
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
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • 🇲🇽 GDP Growth Rate YoY Final Actual: -1.4% Previous: -0.5% https://www.dailyfx.com/economic-calendar#2020-05-26
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.64%, while traders in US 500 are at opposite extremes with 75.52%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/5aSCLBqXc1
  • Heads Up:🇲🇽 Economic Activity YoY due at 11:00 GMT (15min) Expected: -3.5% Previous: -0.6% https://www.dailyfx.com/economic-calendar#2020-05-26
  • Heads Up:🇲🇽 GDP Growth Rate YoY Final due at 11:00 GMT (15min) Previous: -0.5% https://www.dailyfx.com/economic-calendar#2020-05-26
  • Emerging market currencies haven’t been treated equally by the effects of global contagion, even if most have suffered to some degree. However withdrawal of investment flows could hit them all. Get your market update from @DavidCottleFX here:https://t.co/QzNoNYgMgP https://t.co/rIrzpGTgvn
  • Chinese President Xi says will step up preparedness for military combat
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Silver: 1.31% Oil - US Crude: 0.90% Gold: -0.22% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/LKcIsCQeTg
  • #DAX30, #dowjones : la reapertura económica lidera los avances #trading https://t.co/GoI9cOuD9A
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 1.28% 🇦🇺AUD: 1.17% 🇬🇧GBP: 1.01% 🇪🇺EUR: 0.57% 🇨🇭CHF: 0.35% 🇯🇵JPY: 0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/eMQxa6E4eU
  • Coming up at half past the hour: my weekly webinar on market #sentiment. Do join me if you can. You can sign up here: https://www.dailyfx.com/webinars/181540619?ref-author=essex&CHID=9&QPID=917711
USD/CAD Rate Forecast: May High on the Radar Ahead of Canada CPI

USD/CAD Rate Forecast: May High on the Radar Ahead of Canada CPI

2020-05-19 00:00:00
David Song, Strategist
Share:

Canadian Dollar Talking Points

USD/CAD consolidates ahead of the update to Canada’s Consumer Price Index (CPI), 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 Forecast: May High on the Radar Ahead of Canada CPI

USD/CAD gives back the advance from the previous week as Federal Reserve Chairman Jerome Powell warns of a protracted recovery, but fresh data prints coming out of Canada may keep the exchange rate afloat as the headline reading for inflation is expected to contract for the first time since 2009.

Image of DailyFX economic calendar for Canada

Canada’s CPI is projected to decline 0.1% in April after expanding 0.9% per annum the month prior, and the economic shock from COVID-19 may force the Bank of Canada (BoC) to implement more non-standard measures as the “Governing Council stands ready to adjust the scale or duration of its programs if necessary.

In turn, the BoC under Tiff Macklem may continue to push monetary policy into uncharted territory as economic activity “will be 15-30 percent lower in the second quarter than in fourth-quarter 2019,” and the central bank may stick to a dovish forward guidance at the next meeting on June 3 as Canada’s Unemployment Ratejumps to 13.0% from 7.8% in March.

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 continue to consolidate over the coming days as it preserves the April range, with the failed attempt to test the monthly low (1.3900) bringing the May high (1.4173) on the radar.

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

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 may trade within a more defined range as the decline from the start of the week fails to produce a test of the monthly low (1.3900), with a move above the Fibonacci overlap around 1.4010 (38.2% retracement) to 1.4040 (23.6% retracement) bringing the 1.4130 (100% expansion) to 1.4150 (161.8% expansion) region on the radar as it largely lines up with the May high (1.4173).
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

News & Analysis at your fingertips.