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
  • Some Evergrande offshore bondholders do not expect company to make interest payment by Thursday deadline
  • The flash September US PMIs slowed more sharply than expected. That was a general trend across the developed world with most economies continuing to slow from their post-Pandemic peak recovery paces https://t.co/TgkUDlOyAe
  • 🇺🇸 CB Leading Index MoM (AUG) Actual: 0.9% Expected: 0.7% Previous: 0.8% https://www.dailyfx.com/economic-calendar#2021-09-23
  • $SPY showing some strength, support at the 50, res at the 23.6 $SPX $ES https://t.co/hYmriFrTKR
  • 🇺🇸 Markit Manufacturing PMI Flash (SEP) Actual: 60.5 Expected: 61.5 Previous: 61.1 https://www.dailyfx.com/economic-calendar#2021-09-23
  • Heads Up:🇺🇸 CB Leading Index MoM (AUG) due at 14:00 GMT (15min) Expected: 0.7% Previous: 0.9% https://www.dailyfx.com/economic-calendar#2021-09-23
  • Bank of England left policy measures unchanged as expected with the Bank Rate remaining at 0.1% and gilt purchases at GBP 875bln.Get your $GBP market update from @JMcQueenFX here:https://t.co/px04sJbCuq https://t.co/uwJLHi8YGL
  • $USD pulling back from that Sept high that was set after FOMC yday price action still messy, but a semblance of support around the 93 handle $DXY https://t.co/8HqX3fqvEI
  • Heads Up:🇺🇸 Markit Manufacturing PMI Flash (SEP) due at 13:45 GMT (15min) Expected: 61.5 Previous: 61.1 https://www.dailyfx.com/economic-calendar#2021-09-23
  • Citi bring forward BoE rate hike forecast to Feb 2022 with a 15bps hike and 25bps in May $GBP
USD/CAD Price Outlook: Rising Support to Challenge Resistance

USD/CAD Price Outlook: Rising Support to Challenge Resistance

Rich Dvorak, Analyst

US DOLLAR OUTLOOK: USD/CAD EYES RETAIL SALES, FOMC MINUTES, OIL PRICES

US Dollar price action was fairly mixed during Monday’s trading session. The Greenback faced heavy selling pressure versus the Yen, but this was offset by strength against commodity currencies like the Australian Dollar and Canadian Dollar. USD/CAD price action ended up gaining 60-pips on the day, likely with the help from lower crude oil prices. There is a strong positive correlation between CAD and oil. As such, the Canadian Dollar might continue trading on its back foot so long as global growth concerns linger and crude oil remains under pressure.

The US Dollar, meanwhile, is still searching for direction as bulls and bears clash over whether or not the Fed will start tapering asset purchases this year. This brings to focus catalysts with potential to sway the Fed taper timeline – such as the upcoming release of monthly retail sales data. Though not as heavy-hitting as inflation or employment data, the retail sales report due Tuesday at 12:30 GMT does stand to fuel some volatility. This is seeing how hard economic data – like retail sales – stands to either reinforce or undermine the poor consumer sentiment report released late last week.

USD/CAD PRICE CHART: DAILY TIME FRAME (24 MARCH TO 16 AUGUST 2021)

USD/CAD Chart

Chart by @RichDvorakFX created using TradingView

That said, better-than-expected retail sales data could keep pressure on the Fed to start tapering asset purchases before year-end. On the other hand, disappointing retail sales figures might be viewed as a reason for FOMC officials to stay patiently accommodative given the resurgence of covid concerns and downside risks faced by the economy. The former scenario would likely see US Dollar bulls make a push whereas the latter may correspond with broad US Dollar weakness. Nevertheless, from a technical perspective, USD/CAD price action continues to oscillate between two conflicting trendlines.

Technical resistance highlighted by the short-term descending trendline, in addition to the 38.2% Fibonacci retracement level of the latest bearish leg, might keep a lid on USD/CAD. Although, eclipsing the 27 July close at the 1.2600-handle could clear the way for US Dollar bulls to take aim at the 19 July swing high before year-to-date highs come back into focus. Upward pressure on USD/CAD price action is being exerted by the medium-term ascending trendline as higher lows form. Nearside support seems formidable, which is underpinned by month-to-date lows in addition to the bottom Bollinger Band and 50-day simple moving average both perched slightly below.

Keep Reading – US Dollar Forecast: FOMC Minutes to Detail Fed Tapering

-- Written by Rich Dvorak, 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