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.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • RT @FxWestwater: Gold, Copper Forecast: XAU Eyes FOMC, Evergrande News Sends Copper Flying Link:…
  • Heads Up:🇳🇱 Consumer Confidence (SEP) due at 04:30 GMT (15min) Previous: -6
  • PBoC liquidity injection + reports that Evergrande will make its next onshore bond payment ($35.88-million on 23 Sept) is bolstering risk appetite here. Yet, there is still no word on the $83.53-million offshore bond payment also due Thursday. Over to you now, Jpow & Co.
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here:
  • Bank of Japan: - Outlook highly uncertain amid Covid - Asset purchase outline unchanged - Cuts assessment of production - exports, production impacted by supply side constraints - BBG
  • Heads Up:🇯🇵 BoJ Interest Rate Decision due at 03:00 GMT (15min) Previous: -0.1%
  • What is your forex trading style? Take the quiz and find out:
  • Hello there traders! @FxWestwater and I collaborated to bring you a breaking news story on China's #Evergrande coupon payment $AUDUSD $NZDUSD #AUD #NZD Check out the full story here -
  • Commodities Update Post #Evergrande Payment News: #Gold trading cautiously higher as #USD falls (Treasury yields rising offsetting price action slightly) Growth-linked #CrudeOil prices pushing higher as Chinese slowdown woes slightly cool
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here:
Canadian Dollar Forecast: USD/CAD Awaiting BoC Meeting

Canadian Dollar Forecast: USD/CAD Awaiting BoC Meeting

Justin McQueen, Strategist

CAD, USD/CAD, Analysis and Talking Points

  • CAD Weakens as Risk Appetite Dips
  • BoC to Stick With October Taper

CAD Weakens as Risk Appetite Dips

A modest bout of risk off sentiment sees commodity linked currencies on the backfoot with safe-havens outperforming. AUD/USD ultimately fell on the back of a dovish taper, with the initial spike higher quickly faded. As I mentioned last week, the Aussie had moved from one extreme to the next, making upside in the pair harder to come by.

USD/CAD continues to hold onto key support in the form of the 200DMA situated at 1.2527, with the current bounce now seeing the 38.2% fib of the 2021 range tested. Above this area of resistance eyes will be on for a move towards 1.2650, however, this would need to be accompanied by a more pronounced pullback in risk appetite and commodities. As it stands, trend signals are somewhat directionless and thus price action could be somewhat choppy in the week ahead.

As I said previously, key support is situated at the 200DMA, therefore a close below this level would likely confirm 1.2947 as a top and increase pressure on the downside with a move to 1.2420.

USD/CAD Chart: Daily Time Frame

Canadian Dollar Forecast: USD/CAD Awaiting BoC Meeting

Source: Refinitiv

For CAD traders, aside from risk trends, focus will lie on the BoC’s monetary policy decision. Since the prior meeting, economic data has come in a touch firmer with the BoC’s CPI measure at 2.5% from 2.3%, while the unemployment rate has dropped from 7.8% to 7.5%. That said, the BoC are likely to stick with its plan to taper QE further in October. However, a factor to be aware of is the recent rise in US/CA 5Y spreads, which points to topside risks for USD/CAD.

USD/CAD vs US/CA 5YR Spreads

Canadian Dollar Forecast: USD/CAD Awaiting BoC Meeting

Source: Refinitiv

A Helpful Guide to Support and Resistance Trading

IGCS: USD/CAD Outlook Mixed

Data shows 72.64% of traders are net-long with the ratio of traders long to short at 2.66 to 1. The number of traders net-long is 5.19% higher than yesterday and 5.75% higher from last week, while the number of traders net-short is 14.02% higher than yesterday and 3.60% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall.

Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed USD/CAD trading bias.

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