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
Subscribe
Please try again
EUR/USD
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
Oil - US Crude
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
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
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrXkcYz https://t.co/FPgZ5gkgrM
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/E0KhcKHrOf
  • For some reason an old story has popped up - many apologies.... https://t.co/jHjQxyFRXM
  • The US dollar is unloved, oversold and at lows last seen over 30-months ago. At the moment there seems to be very little reason to buy the greenback. Get your $USD market update from @nickcawley1 here:https://t.co/VY3SLs35cp https://t.co/w5ljByv9cf
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/CpqePQYF4E
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/Rg2YGZCUCr
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/ftrbRkFiJF
  • Human error in the forex market is common and often leads to familiar trading mistakes. These trading mistakes crop up particularly with novice traders on a regular basis. Learn about the top ten trading mistakes and how you can avoid them here: https://t.co/i8E2AXtzF3 https://t.co/Hny2HMYo4I
  • (Weekly Fundamental) Australian Dollar Outlook: Tied to Biden Stimulus Bets, S&P 500, US Dollar, Treasuries $AUDUSD #SP500 #stimulusbill #USD https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2021/01/16/Australian-Dollar-Outlook-Tied-to-Biden-Stimulus-Bets-SP-500-US-Dollar-Treasuries.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/H7aus0Aljt
  • The inside bar pattern occurs regularly within financial markets. Incorporating the inside bar strategy can enhance a trader's market analysis. Find out how more here: https://t.co/E3EWOYTYNw https://t.co/7zI3p6UNVs
BOC Decision: Canadian Dollar Crumbles as Poloz Capitulates & Cuts

BOC Decision: Canadian Dollar Crumbles as Poloz Capitulates & Cuts

2020-03-04 15:15:00
Rich Dvorak, Analyst

CANADIAN DOLLAR PRESSURED AFTER BOC DECISION TO CUT RATES BY 50-BPS

  • The Bank of Canada (BOC) has finally capitulated to dovish market expectations and cut its policy interest rate target by 50-bps to 1.25%
  • USD/CAD price action ripped higher while spot CAD/JPY took a plunge as the Canadian Dollar comes under pressure following the latest BOC decision to cut rates
  • The BOC has not lowered its benchmark interest rate since July 2015 but now joins the collection of global central banks providing accommodative monetary policy

The Canadian Dollar is crumbling in response to the latest BOC decision that just crossed the wires. The Bank of Canada, championed by Governor Stephen Poloz, announced that the central bank cut its benchmark interest rate by 0.5% from the previous 1.75% level.

Forex for Beginners
Forex for Beginners
Recommended by Rich Dvorak
Forex for Beginners
Get My Guide

This was the first time that the BOC cut rates since July 2015 and first 50-bps cut since March 2009. According to the press release accompanying this morning’s interest rate decision, the Bank of Canada acknowledged that “the first quarter of 2020 will be weaker than originally expected.”

The BOC also noted how the recent drag on economic activity across Canada – largely due to the novel coronavirus outbreak and widespread railroad traffic disruptions – could weigh on BOC outlook further if sustained.

Learn more: Impact of Virus Outbreaks on Markets

CANADIAN DOLLAR INDEX PRICE CHART: 15-MINUTE TIME FRAME (MARCH 04, 2020)

Canadian Dollar Index Price Chart BOC Decision Rate Cut March 2020

Chart created by @RichDvorakFX with TradingView

The move was largely expected by traders, however, considering that overnight swaps priced in 43-bps of easing prior to this morning’s rate decision from the BOC.

Nevertheless, the Canadian Dollar Currency Index (CXY) took a sharp drop immediately after the Bank of Canada announced that it cut rates by 50-bps, which was more than the median economist estimate calling for a less-aggressive 0.25% cut.

Trading Forex News: The Strategy
Trading Forex News: The Strategy
Recommended by Rich Dvorak
Trading Forex News: The Strategy
Get My Guide

CAD price action has potential to slide further now that the BOC Governing Council has officially joinedother major central banks providingaccommodative monetary policy since capitulating to dovish market expectations.

This is seeing that the BOC decision today opens up the door to more interest rate cuts down the road, which is in consideration of the latest forward guidance provided by the Bank of Canada.

Specifically, Stephen Poloz and the BOC Governing Council noted in this morning’s press release that the central bank “stands ready to adjust monetary policy further if required to support economic growth and keep inflation on target.

USD/CAD PRICE CHART: 1-HOUR TIME FRAME (MARCH 04, 2020)

USDCAD Price Chart Canadian Dollar BOC Decision March 2020 Interest Rate Cut

USD/CAD price action spiked higher into the 1.3400 handle following the BOC rate cut. The Canadian Dollar might falter further against its US Dollar counterpart with spot USD/CAD showing potential of testing year-to-date highs around the 1.3460 mark.

USD/CAD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -13% 7% -8%
Weekly -5% -2% -4%
Learn how to use sentiment in your trading strategy
Get My Guide

Another possible level of technical resistance could be around the 1.3439 price. This area is the upper barrier of the options-implied trading range for USD/CAD derived from overnight options contracts, which was outlined in this US Dollar forecast published yesterday.

CAD/JPY PRICE CHART: 1-HOUR TIME FRAME (MARCH 04, 2020)

CADJPY Price Chart Canadian Dollar BOC Rate Decision March 2020 Cut

Spot CAD/JPY took a 40-pip spill down to the 80.000 level immediately after the BOC interest rate decision, which completely erased gains notched earlier during Wednesday’s trading session. Likewise, the Canadian Dollar is now lower on the day relative to most other major currency pairs.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by Rich Dvorak
Improve your trading with IG Client Sentiment Data
Get My Guide

As such, spot CAD/JPY might look toward the October 03 and August 25 intraday swing lows printed last year, likely driven by a bogged down Canadian Dollar and inflated BOC rate cut bets, if Loonie bears can breach the 80.000 price level.

Keep Reading: US Dollar, Dow & Gold React as Fed Delivers Shock 50bps Cut

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES