2019-11-11 • Updated
General overview
In the Tokyo morning, Loonie reverted its recent bullish bias and sent prices towards the sturdy support at 1.3350. In the course of the European session, the downward pressure eased and helped USD to rise higher.
Fundamentals
Yesterday we heard BoC’s Governor S. Poloz speaking at Durham College. He sounded a bit dovish and cautious. Mr. Poloz noted in his speech that Canada’ economic growth prospects are still unclear to the Bank of England as Trump administration’s intentions with regard trade deal with Canada are still unknown. Although President Trump is determined to target Mexico, there is still great uncertainty over the NAFTA deal and its consequences for Canada. Also, we received some comments on the housing prices from the BoC’s Governor. It was said that recent upsurge in housing prices is not driven by fundamental demand.
USD moved higher overnight as investors have become more optimistic about the Trump’s ability to enact pro-growth policies. Fed’s speakers (George, Kaplan, and Fischer), Chair Yellen backed expectation for more US interest rate hikes and provided an additional boost for the currency overnight.
Tokyo’s revival of oil prices was positive for the loonie. Brent oil futures surged to $51.76. WTI futures were also higher in the Asian session. The optimism that an OPEC-led production deal cut will be extended took its toll. USD/CAD dropped to the important level at 1.3350 (50-H4 MA). Today’s focus will be on the US crude oil inventories data. If the release posts another buildup in US crude stockpiles, the loonie’s reaction will be negative.
Towards the end of the week, we will be waiting for US and Canadian economic growth figures coming on Thursday and Friday respectively. A strong Canadian GDP release will certainly be favorable for CAD’s valuation.
Technical levels
USD/CAD will probably continue its roundabout movement within the Ichimoku cloud on the H4 timeframe. A break of the upper border (1.3380) will open the way towards the next immediate resistance at 1.3415. On the downside, the main supports can be found at 1.3286 (100-day MA), 1.3350 and 1.3280 (the upper border of Ichimoku cloud on the daily timeframe).
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.
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Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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