USD/CAD ANLAYSIS & TALKING POINTS
- Canadian CPI report retains BoC on their toes.
- Fed fee announcement up subsequent tomorrow.
- USD/CAD approaches 1.3371.
CANADIAN DOLLAR FUNDAMENTAL BACKDROP
The Canadian greenback gained traction after Canadian CPI confirmed elevated inflation (see financial calendar beneath) on each core and headline prints (YoY). A significant contributor has been the upside rally in crude oil costs for the headline learn. CPI elevated in all provinces with shelter costs rising by way of the lease index.
On the similar time, US constructing allow information confirmed some marked enhancements relative to forecasts however housing begins contracted fairly considerably. Whereas this information is unlikely to influence the Fed tomorrow, it does present a possible slowdown on the US housing market.
USD/CAD ECONOMIC CALENDAR (GMT +02:00)
Supply: DailyFX Financial Calendar
Cash markets at the moment are pricing in a further fee hike by the Financial institution of Canada (BoC) with inflation information supplementing current sturdy jobs information. Trying ahead to tomorrow, ought to the Fed announcement be construed in a dovish gentle, USD/CAD might breakdown additional. The BoC’s Kozicki shall be in focus later this night and it is going to be fascinating to see the response to the newest inflation report.
BANK OF CANADA INTEREST RATE PROBABILITIES
Supply: Refinitiv
TECHNICAL ANALYSIS
USD/CAD DAILY CHART
Chart ready by Warren Venketas, IG
Every day USD/CAD value motion exhibits the massive drop post-CPI breaking beneath each the 50-day and 200-day transferring (blue) averages respectively. The current swing low at 1.3373 nonetheless holds however as talked about above, a much less aggressive stance from Fed Chair Jerome Powell might see the 1.3300 psychological deal with below risk from CAD bulls.
Key resistance ranges:
- 1.3500
- 200-day MA
- 50-day MA
Key help ranges:
- 1.3373
- 1.3300
IG CLIENT SENTIMENT DATA: BEARISH
IGCS exhibits retail merchants are presently LONG on USD/CAD , with 55% of merchants presently holding lengthy positions (as of this writing). Obtain the newest sentiment information (beneath) to see how day by day and weekly positional modifications have an effect on USD/CAD sentiment and outlook!
Contact and followWarrenon Twitter:@WVenketas
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