The USD/CAD pair fell during most of the session on Friday as the Canadian jobs number was outstanding. However, by the end of the session we got quite a bit of a bounce and formed a hammer that centered just below the 0.98 handle.
This pair should continue to find buyers in this general vicinity, but the oil markets must be followed in order to truly understand where this pair wants to go. The light sweet crude market should continue to drive this pair back and forth, and it must be said that as oil sold off during the Friday session, the US dollar gained against its northern counterpart.
We see a significant amount of resistance at the 0.9950 level, and a move above that area should signals this pair going much higher. Depending on what happens in the oil markets, this will more than likely move the markets in one direction or the other. The Middle East of course is always capable of producing some type of negative headlines that will drive crude oil much higher, and as such we expect even if this pair wants to go to 1.04 that it will struggle as there will be a lot of back and forth with headlines coming out.
The Canadian dollar should be one of the more favored currencies going forward if we can get some type of reversal in the oil markets. The currency pair is one that has a history of going sideways for some time, so we won’t be surprised if we actually start to form a small consolidation zone as we had seen the previous two weeks. However, we think that in the long run this pair will show itself as being negative if we can break the bottom of the Friday range. Because of this, we think that the 0.97 level is the signal to go short, while the 0.9950 level is signal to go long.
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Today's focus will be on the ADP Non-Farm Employment Change. This report will give investors a heads up on what to expect from Friday’s U.S. Non-Farm Payrolls report. If the number is bullish then demand for higher risk will rise, pressuring the U.S. Dollar. This will give the Canadian Dollar a boost. If the report shows weakness then look for the USD/CAD to get stronger.
Another factor that may drive up the Canadian Dollar is demand for higher risk assets that could come about if Spain makes a formal request to the European Central Bank for financial aid. Traders are waiting for this to take place and it could trigger a sharp rise in global equity markets, gold and crude oil. Since the prices of these two commodities have a major influence on the Canadian economy.
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As described yesterday, finally USD/CAD confirmed to continue his journey to the south with the bears. Stuck in its trendline, candle formations and D1 stochastic chart everything will accompany the pair back to 0.9625 area. Unless something extraordinary happens, then this scenario will be easy to execute.
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Despite the
strengthening of the overall value of the dollar yesterday, apparently the USD/CAD has not been able to escape from the down trend line, even now in D1 stochastic very supportive to force the pair back melanjutka trend for this fall. Note also candlestick pattern formed his late closing market today before we decide to get together with the pair slid down.
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The USD/CAD pair is trading at 0.9765, with the U.S. dollar.UU. a little strong on the morning trade US session as the markets opened the dollar was picking up strength as expectations of positive data will be today. The confidence of the consumer and housing data, as well as the Richmond Fed index is scheduled for its premiere in Canada, while retail sales could take a lot of risk for the CAD
This report is written earlier than usual, so most of the echo data not yet released in North America.
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After successfully defending his rising trend, USD/CAD seems to have been preparing to resume its rally. The pair are now close to its trend line and intercepted by FIBO 50, in addition, the stochastic is also prepared to give a boost to this pair.
CPI is often misunderstood in forex, actual CPI measure of inflation, and inflation is bad for the currency because it will increase the interest rate.
The fundamental reason for a person to invest is to make profit, the lowest benefit of a risk is 0%. So if someone hold bonds issued by the Canadian Govt then I do not have a risk, Because The Canadian Govt can not default on its own bonds.
Thus, when high interest, people will buy stocks, because investors will get higher revenue at a high risk investment.
And the interest rate is determined based on inflation.
CPI means when goods rose and currencies fell, so the higher CPI worse impact on the currency.
So, if an anulized CPI of less than 1%, then the BOC would not be increasing the interest rates in 2014 too, roomates would cause a weakness in the Canadian dollar.
So, if we see a 2% annualized inflation, the central banks like it, so No Change in Interest rate outlook.
This meens if the annualized CPI is Close to 3% we should see a drop in the value of the Currency .... If however we see a CPI number greater than 3% (Anuallized) then the central bank will think of raising interest rates to curb inflation ... this would mean the value of the currency should increase of.
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USD/CAD is having trouble breaking above the .9720 area, which is a former support level on the H1 chart. Stochastic is also giving the bears support at the overbought zone. The bears can jump in once the pair breaks below the consolidation at the chart, but watch your trades closely in case the pair breaks above its resistance level.
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USD/CAD downtrend has stalled. If you're looking to go short on this pair, it might be prudent to wait for a better entry. The pair seems to be in the middle of a retracement as price has stalled and the Stochastic is showing that conditions are oversold. If the pair does pull back, it could go all the way to the 50% FIBO retracement level (also a former broken support level) before finding resistance.
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We see a double bottom at USD / CAD H4 at this time, but it should be noted that the pair is also being led to her neckline at around 0993. If we can see a solid candle above her neckline, the pair will be able to rise up to 100 pips, otherwise if the neckline survive then it will bounce back. Once again, good things happen to those who wait :)
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USD / CAD in the determination of the moment, although downward channel is still valid, but 1.0 support will be decisive.
If the level is successfully penetrated by the USD / CAD, then this pair will continue to slide to 0.9, however, if this last level, then this pair will bounce back at least to the upper boundary of the channel.
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After yesterday we see that the USD / CAD is still in the channel decreases, now we can see that in H1 this pair will be captured in the 38.2% Fibo.
In addition, stochasyic also shows if this pair is going into the overbought area. Wait until he entered the overbought area we are ready to take him to the south.
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Descending channel USD / CAD is still continuing ... and now are approaching the bottom line at around 1.0.
Meanwhile, the stochastic also shows oversold position ...
However, here we should really be careful in taking the stop loss.
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