USD/CAD Probing March High Ahead Of BOC
City Index | Apr 24, 2019 02:57AM ET
With the US dollar contemplating a breakout and BOC unlikely to provide a hawkish surprise, we’re looking for USD/CAD to break above its March high.
We head into today’s meeting with little expectation for BOC to shift from their dovish stance. Whilst employment data has been one of the better economic performers for Canada, it has failed to translate into household activity. Inflation has moved higher, but this is largely driven by energy prices and leading indicators such as PMI’s remain within lacklustre growth territory. Furthermore, consumer confidence has nosedived to a 2-year low, which is less than an idea when BOC remains concerned with household activity. Barring a downside shock for USD bulls (…and keeping Friday’s GDP in mind), this could help USD/CAD break to new highs.
Price action on the daily chart has been choppy of late, but there are signs that USD/CAD could be ready to burst higher. The 50-day MA is supporting the trend structure, and two prominent pinbars are providing a zone of support around 1.3250/75. That this coincides with the January trendline further suggests demand down at these levels. Furthermore, yesterday’s bullish range expansion has tested a retracement line and finds itself within easy reach of the March high. If it can break above 1.3470 opens-up the skies and brings 1.3565 and 1.3665 into focus. A break below 1.3403 would place it onto the backburner.
As for market positioning from the weekly COT report, traders appear cautiously optimistic for a higher USD/CAD. Large speculators have increased net-short exposure to CAD futures and are at their most bearish in 3-months. The sentiment is far from stretched, therefore no immediate concerns of a reversal on the weekly charts.
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.