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
Wall Street
Bullish
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
More View more
Real Time News
  • 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/1xhewkdV21
  • (USD Weekly Tech) US Dollar Dominant Uptrend Back In Focus: EUR/USD, USD/JPY, NZD/USD, USD/CHF https://www.dailyfx.com/forex/technical/article/special_report/2021/09/20/US-Dollar-Dominant-Uptrend-Back-In-Focus-EURUSD-USDJPY-NZDUSD-USDCHF.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/IpwzBGCi7P
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/qv8keXFzHZ
  • Join @IlyaSpivak at 22:00 EST/2:00 GMT for his cross-market weekly outlook webinar. Register here: https://t.co/MKGHc9ae64 https://t.co/JMlT0Wn3DK
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/sbejkd7XT5
  • *Reminder: Weekly Strategy Webinar Monday morning at 8:30am ET - https://t.co/lxd5fZnn4H Mid-Week Market Update on Wednesday at 9:30am ET - https://t.co/8SFBJxNZrA
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/CJR61cljOe
  • (AUD Weekly Tech) Australian Dollar May Wilt, Downtrends Resume: AUD/USD, AUD/JPY, AUD/NZD, AUD/CAD https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/09/19/Australian-Dollar-May-Wilt-Downtrends-Resume-AUDUSD-AUDJPY-AUDNZD-AUDCAD.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/DedoOKJMXh
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUuBpt https://t.co/GQB0ic9Ahe
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/lx3cMSpZNc
Canadian Dollar Rate Forecast: Running With Commodity FX Bulls

Canadian Dollar Rate Forecast: Running With Commodity FX Bulls

Tyler Yell, CMT, Currency Strategist

Canadian Dollar Talking Points:

  • USD/CAD Price Forecast: downside favored on close below 1.2490 (50% of Sept.-Oct. range)
  • Employment data from US & CA likely to drive trend over coming week
  • Sentiment Highlight: net-bullish bias in retail positioning provides ST bearish outlook

After seven straight daily declines, which started on December 26, USD/CAD is losing its bearish momentum. At the same time the bearish momentum is waning, USD/CAD technical studies are showing multiple levels of support.

Rebound Losing Steam

The price of USD/CAD bounced aggressively off 1.2062 in early September to 1.2917 in late October. 1.2917 proved to be a tough level to break as the price attempted to break above at the end of November and twice in December to no avail before retracing. The end of December was a particularly impressive route as the seven straight daily declines took the price down to 1.25, which is the 50% retracement of the September-October range.

Unlock our Q1 forecast to learn what will drive trends for the US Dollar at the open of 2018!

Institutional Positioning & Yield Spreads

From an institutional speculative positioning perspective, CAD longs cooled off. Traders may be paring longs in anticipation of a power pack of fundamental data that includes US & CA employment data.

Two other supplements to my view of USD/CAD is institutional positioning and the US/CA 2-Year rate spread. The spread has done a fair job of determining the price action of USD/CAD, and a recent rebound in rate hike expectations by the Bank of Canada helped provide an unwind of short positions for the Loonie. The current spread between US minus CA 2-year yields is ~25bps. Should the spread manage to widen beyond 35bps in favor of the US, traders would likely see a breakout higher in USD/CAD develop back toward 1.30.

Another potential development for the bulls came from positioning. The net speculative positioning by institutions also pared their long CAD trades in the final week of 2017 as the net long position fell ~62% from ~45,800 net long futures contracts by 28,555 contracts to 17,346 net long contracts.

USD/CAD Chart: Pushing Down Into Key Support

Please add a description for the image.

Chart created by Tyler Yell, CMT. Tweet @ForexYell for comments, questions

The breakout level that could indicate the amount of selling was overdone and a USD rally is on its way would be a break above 1.2650, the 9-day midpoint per Ichimoku and a break above 1.2710 (26-day midpoint) would indicate the September-October move higher is set to resume. Should the price find a ceiling of resistance in the 1.2650/2710 range Only a breakdown below 1.2650 on a closing basis for USD/CAD would adjust the bullish forecast.

Valuable Insight from IG Client Positioning for USD/CAD

Please add a description for the image.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDCAD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDCAD-bearish contrarian trading bias.

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

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

DISCLOSURES