USD/CAD Elementary Backdrop
USD/CAD had a rollercoaster week after the Financial institution of Canada (BoC) shocked markets by climbing charges by 100bps. The knock-on impression noticed cash markets worth the Fed’s upcoming fee resolution increased with 100bps name gaining traction. Increased than anticipated inflation, PPI and retail gross sales information augmented this outlook as we stay up for Canadian inflation subsequent week (see financial calendar under):
USD/CAD ECONOMIC CALENDAR
Supply: DailyFX Financial Calendar
Depressed cimpolite oil costs stay with the Chinese language economic system displaying indicators of slowing regardless of basic provide information beneath pressure.
USD/CAD DAILY CHART
Chart ready by Warren Venketas, IG
Price motion on the each day USD/CAD chart is buying and selling at a key inflection level (long-term channel resistance) making increased highs. Quite the opposite, the Relative Power Index (RSI) displays slowing upside momentum (pink) thus suggestive of bearish divergence. Historically, bearish divergence factors to impending draw back however beneath the present basic backdrop it’s tough to see this occurring short-term. A affirmation shut/breakout above the ascending channel will invalidate this bearish indication notably with markets expectant of a 100bps Fed fee hike.
Key resistance ranges:
Key help ranges:
- 1.0327 (382.% Fibonacci)
- 20-day EMA (purple)
IG CLIENT SENTIMENT DATA: MIXED
IGCS exhibits retail merchants are at the moment prominently LONG on USD/CAD, with 62% of merchants at the moment holding lengthy positions (as of this writing). At DailyFX we sometimes take a contrarian view to crowd sentiment however after current adjustments in longs and shorts, sentiment reveals a watchful bias.
Contact and observe Warren on Twitter: @WVenketas