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USD/CAD to stabilize near 1.25 in October

al_dcdemo Posted 26 Sep. as Analysis on USD/CAD, Target: 1.2475, Date: 1st of November, 12:00 GMT  in #Technical analysis #USD/CAD #Daily Chart #Downtrend #Weekly Chart #Technical Tools #Net Short Positioning #Hawkish Boc #Short Term Bottom
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
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A sharp rally at the start of 2016 and an even more impressive reversal was followed by an upward sloping consolidation. 1.28 - 1.30 has been centra…
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al_dcdemo 13 Oct.

UPDATE 5: Earlier today a combo of U.S. inflation and retail sales reports for September was published. Inflation indicators came in somewhat weaker than expected but mostly higher than in August while retail sales were better than expected. Market focus was on inflation and initial reaction was to sell the U.S. dollar. Moves stalled after 50 - 70 pips and later reversed to various extents across U.S. dollar pairs as traders digested otherwise solid reports. The dollar will close the week lower against all major currencies.

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al_dcdemo 18 Oct.

UPDATE 6: Canadian dollar has been less driven by oil prices recently. 530-pip move from the lows near 1.2050 could be seen as a correction of excessive monetary policy tightening expectations. Uncertainty surrounding NAFTA has been another headwind. The pair found equilibrium in a range centered on 1.25 level. 1.24 - 1.2430 is the range support and 1.2570 - 1.26 is the resistance. A convincing break of either extreme will signal the direction for the next leg.

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al_dcdemo 21 Oct.

UPDATE 7: U.S. dollar was the winner of the week. Solid inflation report last week and renewed prospects for a successful tax reform have been the fundamental drivers. Technically, 91 appears to have been more than just a shorter-term lower in the U.S. dollar index, with 95 the next target. 10-year U.S. treasury yield closed the week on its highs, just below the important 2.4% level, of which Bill Gross says is a trend-changing point. Apart from ECB and BOE next week, one of the most important events to watch out for is nomination of the, probably new, Fed Chair.

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al_dcdemo 25 Oct.

UPDATE 8: BOC decided to leave overnight rate at 1.0% at today's meeting. GDP forecasts were revised slightly lower while CPI forecasts were just marginally bumped up. The bank expressed concern with regard to geopolitical developments, NAFTA and high levels of household debt, and said they will be cautious in making future adjustments to the rate. The fact that such a scenario was widely anticipated didn't help the Canadian dollar. After a quick washout to 1.2635, USD/CAD jumped 100 pips, added 80 more in the following hours and stalled ahead of 2015 - 2017 S/R line (1.2825).

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al_dcdemo 27 Oct.

UPDATE 9: Cautious tones from ECB and BOC, weak Australian inflation one side and progress in U.S. politics and much better than expected Advance GDP reading on the other one were among the drivers of major currency pairs this week. BOE is expected to hike next week but it will be a one-off for now. U.S. dollar was mostly bought up until around the time Europe started heading for the pub. Rumor of Trump leaning toward Powell as the next Fed chair sparked a bout of profit-taking. The dollar ended the week higher against every major currency bar the yen.

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USD/CAD to break below 200 week SMA

al_dcdemo Posted 28 Aug. as Analysis on USD/CAD, Target: 1.2275, Date: 2nd of October, 12:00 GMT  in #Technical analysis #USD/CAD #Daily Chart #Weekly Chart #Technical Tools #200 Week Sma #Net Short Positioning #Strong Downtrend #Hawkish Boc
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
A sharp rally at the start of 2016 and an even more impressive reversal was followed by an upward sloping consolidation. 1.28 - 1.30 has been centra…
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al_dcdemo 9 Sep.

UPDATE 5: Three major central banks met this week. On Tuesday, RBA kept interest rates unchanged but were upbeat on the economy. On Wednesday, BOC delivered second hawkish hike in the row. Markets expect one more hike from them this year. ECB stood pat on Thursday but they will likely announce further tapering of asset purchases in October. Next Thursday, SNB and BOE meet. No change is likely to be expected from SNB while the franc is trading below 1.20 against the euro. BOE will hike rates at some point in the future but that won't be this year.

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al_dcdemo 16 Sep.

UPDATE 6: It was a positive week for the U.S. dollar, which closed higher against most major currencies. By far the best performer was the pound, which rallied on a hawkish shift from the BOE. New Zealand dollar closed marginally higher after some election polls indicated continuation of the status quo. Following weekly close below strong support at 108.10, yen reversed sharply and ended the week above 110.50. Next week's main event is FOMC meeting at which the committee is widely expected to announce balance sheet adjustment plan. Forward guidance on rates will be watched closely too.

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al_dcdemo 18 Sep.

UPDATE 7: USD/CAD appears to be in the process of making a (short-term) bottom above the 50.0% retracement of the 2011 - 2016 uptrend. Volatility fell in recent days as the pair consolidates after selling off following the second consecutive rate hike by the BOC. Many are expecting one more hike from the bank as early as this year and that should keep sellers involved. 1.2230 - 1.2250 is the initial resistance and the next one somewhere in 1.23 - 1.2350 area. Buyers were seen near 1.2125.

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al_dcdemo 20 Sep.

UPDATE 8: Fed remains on track with monetary policy. Balance sheet adjustment will commence in October. Most members are expecting another hike this year. Three more hikes are projected for 2018. Neutral rate was downgraded to 2.8% from 3.0%. Market clearly expected something less hawkish from them. The dollar rallied across the board but the rally run out of steam after 100 - 150 pips of gains. Any further gains may not last because, fundamentally, nothing really changed today.

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al_dcdemo 1 Oct.

UPDATE 9: It seems that U.S. dollar finally found some traction. A rise in bond yields after more hawkish than expected Fed last week is one part of the story. The other is that despite all difficulties in passing new healthcare bill, U.S. tax reform may prove to be a success for Administration. In any case, market got ahead of itself on the convergence trade and what we are seeing now is probably just a healthy retracement and not an outright reversal. Another supportive factor for the U.S. dollar is that any weakness in September data will be dismissed due to hurricane impact.

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USD/CAD downtrend to continue

al_dcdemo Posted 28 July as Analysis on USD/CAD, Target: 1.2275, Date: 1st of September, 12:00 GMT  in #Technical analysis #USD/CAD #Daily Chart #Weekly Chart #Technical Tools #Net Short Positioning #Strong Downtrend #Shallow Pullbacks #Hawkish Boc
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
A sharp rally at the start of 2016 and an even more impressive reversal was followed by an upward sloping channel. 1.28 - 1.30 has been central to t…
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al_dcdemo 19 Aug.

UPDATE 6: This week was to some extent a reversal of last week's risk-off moves. Canadian and Australian dollars were beneficiaries with yen and franc recording just marginal losses. It was not a good week for European currencies. Pound was the loser of the week while euro remains to be buoyed by dip buyers. Next week will be a quiet one data-wise. All eyes will be on Jackson Hole Symposium at the end of the week, which will feature speeches by Yellen and Draghi. Rumours go that Draghi will avoid talking monetary policy. That should increase volatility if he does say something.

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al_dcdemo 24 Aug.

UPDATE 7: Price action has been pretty sedate so far this week with most major currency pairs sitting near the middle of their weekly ranges. Euro and Canadian dollar are the only two that are marginally better than the U.S. dollar. There's been a little bit more action in the New Zealand dollar but selling stalled ahead of the strong support at 0.72. Tomorrow could prove to be the most lively day of the week with German Ifo Business Climate, U.S. (Core) Durable Goods Orders and Day 2 of the Jackson Hole Symposium which will bring Fed Chair Yellen and ECB President Draghi speeches.

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al_dcdemo 26 Aug.

UPDATE 8: Speeches by Yellen and Draghi at Jackson Hole Symposium met expectations. Yellen didn't even talk about monetary policy while Draghi avoided giving any new information on what ECB may do in autumn. Lack of hawkish clues from Yellen were enough to send the U.S. dollar lower across the board and then later some upbeat comments from Draghi (even though he warned about inflation not yet being self-sustained) propelled euro to a new two-year high. Yen, pound and Australian dollar were flat on the week while New Zealand dollar was the laggard.

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al_dcdemo 31 Aug.

UPDATE 9: U.S. dollar index broke to the lowest level since 2015 on Monday before staging a sharp pullback. That coincided with euro breaking above 1.20 and 2012 low (1.2040) and franc below 0.95. Yen was once again contained by the strong support at 108. Kiwi is out of favour ahead of N.Z. general election. Canadian dollar sold off hard yesterday but already recouped all losses and some after exceptional GDP figures. Australian dollar has been the least volatile of the bunch but with some impressive reversals. NFP report tomorrow will be a nice finale to this exciting week.

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al_dcdemo 1 Sep.

UPDATE 10: U.S. jobs & wages report for August fell short of expectations on most metrics. August is historically weak with regard to NFP figure but Wednesday's strong ADP figure gave U.S. dollar bulls some hope that this time was different. It wasn't and the immediate reaction was to sell the dollar. The report itself was not great but was solid enough and subsequent price action seemed to agree. The U.S. dollar ended the week higher against euro, franc, yen and New Zealand dollar, and lower against pound, Canadian dollar and Australian dollar.

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