usd to cad

EUR: Becalmed

EUR/USD continues to trade in very narrow ranges, with US Treasury yields and USD/CNH probably the main short-term drives in thin summer markets. 1.0850-1.0930 looks to be the short-term range and we do not see a local catalyst for a breakout until tomorrow's release of the flash PMI readings for August. As to tightening expectations, the market only now prices in 20bp of rate hikes by the turn of the year - probably underestimating the chance of a 25bp ECB rate hike in September.

The Eurozone data calendar is light today. But amidst the pessimism in the Eurozone we should at least see a better monthly current account surplus reading - somewhere in the EUR10-20bn area. Remember this compares to the huge EUR35bn monthly deficits seen a year ago, when the spike in energy prices sank the euro.

Elsewhere, high US rates are keeping under pressure the high beta European currencies of Norway's krone and Sweden's krona. It seems a long time until the krona could possibly deriv

UK Inflation Influences GBPUSD Price Line, USDCAD Shows Canadian Dollar Strength, Crude Oil Price (USOIL) Has Been Rising Gradually

UK Inflation Influences GBPUSD Price Line, USDCAD Shows Canadian Dollar Strength, Crude Oil Price (USOIL) Has Been Rising Gradually

Jing Ren Jing Ren 14.04.2022 08:55
USDCAD tumbles towards daily support The Canadian dollar surged after the BOC’s aggressive rate hike of 50bp. The pair’s recovery came under pressure at 1.2670. A bearish RSI divergence shows a loss of momentum in the rally and the ensuing break below 1.2580 acts as confirmation of underlying weakness. A combination of stop losses and momentum selling could further depress the greenback. An oversold RSI may attract some bargain hunters and 1.2480 is a major level to keep the rebound intact. In fact, its breach could cause extended losses beyond 1.2400. Related article: ECB Interest Rate Decision Is Coming! European Indices (DAX, CAC40) To Plunge Or Rise? What About Forex Pairs? GBPUSD breaks resistance The pound recoups losses as the UK’s March CPI beats market expectations. Overall sentiment ticked down after the pair dropped below the psychological level of 1.3000. However, a swift bounce above 1.3080 is an encouraging sign for the bulls as it forced the bears to cover their positions. 1.3180 is the next resistance and a bullish breakout could bring the sterling back to 1.3300 and open the door to a reversal. The RSI’s overbought condition may lead to a pullback. And 1.2990 is the immediate support should this happen. USOIL grinds resistance WTI bounces as major trading houses plan to trim purchases of Russian crude. The price is slowly recovering from the daily demand zone around 94.00. This could be a consolidation phase after the recent wild ride. The RSI’s double-dip in the oversold territory triggered a buy-the-dips behavior. A break above 105.00 could cause a broader recovery to 115.00. The RSI’s swing into overextension may limit the impetus. The psychological level of 100.00 is a fresh support and 94.00 is a critical floor to keep the price afloat.
British Pound To Canadian Dollar (GBP/CAD) Bounces To Ease Severely Oversold Conditions As Predicted, EUR/USD again holds important 5 year trend line support at 1.0850/20

British Pound To Canadian Dollar (GBP/CAD) Bounces To Ease Severely Oversold Conditions As Predicted, EUR/USD again holds important 5 year trend line support at 1.0850/20

Jason Sen Jason Sen 14.04.2022 11:11
EURUSD again holds important 5 year trend line support at 1.0850/20. A low for the day exactly here & at the March low leaves a potential double bottom medium term buy signal now as I suggested yesterday. Longs need stops below 1.0790. A break lower meets 37 YEAR TREND LINE SUPPORT AT 1.0760/20. Longs need stops below 1.0670. Longs at 1.0850/20 target 1.0900 then 1.0930/40 (a high for the day exactly here on Monday). Further gains are possible to minor resistance at 1.0960/80. USDCAD our shorts at 1.2650/70 target 1.2610/1.2590 & 1.2525/05 today. If we continue lower look for 1.2480/70. We have another buying opportunity at 1.2440/10. Longs need stops below 1.2370. A break lower is an important medium term sell signal. Obviously strong resistance at 1.2650/70. Shorts need stops above 1.2690. A break higher is a medium term buy signal. GBPCAD bounces to ease severely oversold conditions as predicted. Strong resistance at 1.6460/80 certainly doing it's job so far this week. However if we continue higher expect very strong resistance at 1.6560/80. Minor support at 1.6410/00. Further losses can retest 1.6315/1.6295. Please email me if you need this report updated or Whatsapp: +66971910019 – To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

(USOIL) Crude Oil Price Crisis!? Fed To Boost (USD) US Dollar? UK Inflation Rate Surprised Many This Week, What About The Following One? Economic Calendar by FXMAG.COM

Mikołaj Marcinowski Mikołaj Marcinowski 16.04.2022 17:59
Today, tomorrow and on Monday many countries around the world celebrate Easter. Friday was a day free for many stock markets and banks too. As we wrote yesterday forex market was live so we may say it had some time to stock (sic!) up. The following week is going bring many news and next proves of hawkish rhetoric of Fed, ECB and BoE. Monday – Going East – Chinese GDP On Monday many, many countries – Germany, Italy Spain, Australia and more has a day free. Only in China, very early in the morning GDP and Industrial Production are printed. Previously Gross Domestic Product amounted to 4%. Another indicator released at 3 a.m. – Industrial Production hit 7.5% previously. Related article: Deutsche Bank Shook DAX! French Election, Inflation And ECB Are Factors Which Shaped DAX (GER 40), CAC40, FTSE 100 And IBEX35 - Top Gainers, Top Losers Tuesday – RBA Meeting Minutes – NZD/USD To Plunge Again!? It’s good to have a look at RBA Meeting Minutes in the morning. The document will be released at 2:30 a.m. and may let us prepare NZD rate prediction. At 1:30 p.m. we focus on the data coming from the USA. Building Permits release previously amounted to 1.865M. This indicator let us diagnose the real estate market in the United States. Wednesday - Crude Oil Price To Skyrocket!? CAD/USD And NZD/USD May Fluctuate! First release of the day is Chinese PBoC Loan Prime Rate which takes place at 2:15 a.m. Previously this indicator amounted to 3.7%. At 1:30 p.m. you better follow CAD/USD and other pairs with Canadian dollar as Core CPI may shake the rate. Indicator amounted to 0.8% previous time. Later in the afternoon investors should follow the release of Existing Home Sales (6.02M) and, what’s most important – Crude Oil Inventories. ON April 13th Crude Oil Inventories hit 9.382M! Very late in the afternoon we focus on New Zealand where CPI (Q1) is released. Let’s follow NZD forex pairs then. Thursday – Huge Gain Of US Dollar Index (DXY) Amid Hawkish Fed!? Follow Euro To US Dollar (EUR/USD) and GBP/USD Fluctuations! What Will BoE And ECB Do? Naturally next Fed decision is made in May, but before it happens we all stay updated with the current Fed rhetoric expressed by i.a. Jerome Powell who speaks at 6 p.m. on Thursday. What’s more it’s going to be a really, really market moving day as alongside Powell, BoE’s Bailey and ECB’s Lagarde speaks as well! Additionally, at 10 a.m. the EU CPI is released. After the recent interest rate decision ECB’s rhetoric is definitely worth a follow! Article on Crypto: Hot Topic - NEAR Protocol! Terra (LUNA) has been seeing a consistent downward price trend, DAI Should Stay Close To $1 Friday – GBP/USD To Plunge!? UK Manufacturing PMI Release And BoE’s Lagarde Speaks Again The following week ends with some important releases. We begin with UK Retail sales, Manufacturing PMI, Services PMI and German Manufacturing PMI. In the afternoon Canadian Core Retail Sales (2.5%) is released. The day ends with ECB’s and BoE’s representatives’ testimonies. Source/Data: Investing.com Economic Calendar
EM Index Inclusions and Exclusions: India Thrives, Egypt Faces Challenges

Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events

Rebecca Duthie Rebecca Duthie 19.04.2022 09:50
Summary: Analysis of; EUR/USD, EUR/GBP, USD/CAD, USD/JPY. Japanese Yen weakens as Bank of Japan fights against increasing Treasury Yields. USD Strengthening as the Fed remains hawkish. The EUR and GBP future prices awaiting the IMF and World Bank Events later this week. EUR/USD, Strengthening USD putting pressure on the EUR. EUR/USD market sentiment is currently reflected as bearish for this currency pair as the graph shows the declining price over the past week. In the past weeks, the Euro has been underperforming as a result of the Russia-Ukraine war causing fears of Eurozone stagflation. The ECB is stuck at the moment with increasing inflation and slow growth, the likelihood of the ECB’s capacity to match the aggressiveness of the Fed is low. Perhaps toward the end of the week we will see the EURO bounce against the USD inlight of the talks at the IMF/World bank events. EUR/USD Price Chart Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   The Value EUR/GBP Awaits Changes in Light of Major Appointments This Week The Euro seems to be strengthening against the GBP after it depreciated late last week. Since the market opened this morning, the investor sentiment for this currency pair has become bullish. There is suspicion that the sharp fall in the value of the EUR/GBP last Thursday may have come out of China in an attempt to stop any more strengthening in the Renminbi. The future value of this currency pair is important to watch in the coming days, with major appointments on talks about finances coming up, especially both the ECB and BoE governors talks at the IMF/World Bank events later this week. EUR/GBP Price Chart USD/CAD Currency Pair holding Stable amidst Current Market conditions The USD/CAD currency pair price is remaining relatively stable given the current risk-averse market sentiment. The USD/CAD currency pair is considered to be volatile, both the CAD and USD reacts quickly to the release of economic data and current market conditions. Despite investors being risk averse, the market sentiment seems to be bullish for the USD inlight of the Fed's hawkish attitude, growing concerns on inflation increases and US rising benchmark yields all leading to a strengthening USD. USD strengthening against the Japanese Yen The USD strengthened against the Yen this past week as a result of the increasing US Treasury yields and the expectation of positive economic data. The price of this currency pair reached the highest since March 2002. The Bank of Japan has been working hard to keep the Treasury yield below 0.25%, the opposite approach the Fed has taken in the fight against inflation, causing the yen to weaken. The Japanese finance minister raises concerns on the damaging effect the weakening yen could have on the weakening economy For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy?   USD/JPY Price Chart Sources: Finance.yahoo.com, Teletrade.eu.
The US Has Again Benefited From Military Conflicts In Other Parts Of The World, The Capital From Europe And Other Regions Goes To The US

Powerful (USD), Really Strong (CAD) - US Dollar To Canadian Dollar, Solid NZD Performance, UKOIL To Stabilize?

Jing Ren Jing Ren 21.04.2022 07:40
Key takeaways: The Canadian dollar soared after red hot inflation readings in March The New Zealand dollar inched lower after the Q1 CPI fell short of expectations Brent crude finds support from a surprise drawdown in inventories USDCAD breaks support The Canadian dollar soared after red hot inflation readings in March. The greenback’s struggle to reclaim 1.2670 suggests a lack of momentum from the buy-side. A fall below 1.2540 triggered a new round of liquidation and further confirmed the bearish RSI divergence. 1.2480 is the next support and an oversold RSI may attract some bargain hunters. However, there is an expectation of stiff selling pressure around 1.2645 as the mood sours. A deeper correction could send the price below the critical floor at 1.2400. Related article: Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events NZDUSD tests resistance The New Zealand dollar inched lower after the Q1 CPI fell short of expectations. A break below the daily support of 0.6730 revealed a lack of buying interest so far. Sentiment turned cautious after the daily chart exhibited a bearish MA cross. On the hourly chart, the RSI’s oversold situation led to some profit-taking off 0.6720. A bullish divergence suggests a slowdown in the current sell-off. Nonetheless, the bulls need to lift offers in the supply zone between 0.6820 and 0.6880 before a reversal could happen. Related article: Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex| FXMAG.COM UKOIL bounces off support Brent crude finds support from a surprise drawdown in inventories. On the daily chart, the price is taking a breather in a flag-shaped pattern after a parabolic ascent. The uptrend can remain intact as long as the support of 98.00 stays still. A tentative break above 114.50 has prompted short-term sellers to cover. The latest pullback saw bids at the 61.8% (104.20) Fibonacci retracement level while the RSI recovers to the neutrality area. A break above 117.80 could extend the rally towards 127.00.
(EUR/USD) - An Eye For An Eye And A Tooth For A Tooth, US Dollar To Canadian Dollar - CAD Has Weakened, DAX (GER 40) Has Slid | Orbex

(EUR/USD) - An Eye For An Eye And A Tooth For A Tooth, US Dollar To Canadian Dollar - CAD Has Weakened, DAX (GER 40) Has Slid | Orbex

Jing Ren Jing Ren 09.05.2022 13:00
EURUSD consolidates The US dollar climbed after better-than-expected NFP in April. The euro is licking its wounds after it broke March 2020’s lows near 1.0640. The price is seeking support above March 2017’s lows (1.0500). The previous rebound came to a halt at the support-turned-resistance at 1.0640. A bullish breakout could drive the bears into giving up their chips, reducing the pressure and potentially paving the way for a rally towards 1.0810. A fall below the current consolidation range (1.0480) would send the single currency to 1.0400. USDCAD bounces higher The Canadian dollar softens as April’s labour market performance fell short of expectations. A combination of a break above March’s high (1.2900) and a bullish MA cross on the daily chart confirms the market’s upbeat mood. The latest retracement found support in the major demand zone over 1.2720. A break above 1.2840 may have flushed remaining selling interests out. Last December’s high at 1.2960 is the last hurdle and its breach could open the door for an extended rally above 1.3100. GER 40 struggles for support The Dax 40 tumbles as risk appetite subsides amid global policy tightening. The index has met stiff selling pressure at the origin of the late April sell-off at 14300. A drop below the psychological level of 14000 prompted buyers to bail out, invalidating the latest rebound in the process. A bearish MA cross is another sign that an imminent sell-off could be building up. A deeper correction below 13570 would send the price action to 13300. 13820 is a fresh resistance in case of a rebound.
Short Squeeze - What Is It? | Binance Academy

End Of Utopia!? Current Strength Of (USD) US Dollar Has Some Disadvantages... Does Fed Bear Them In Mind?

Chris Vermeulen Chris Vermeulen 09.05.2022 17:26
The US Dollar continues to attract capital from investors all over the world. But could this be a double-edged sword for US stocks? As capital flocks to the USD, this in turn hurts US multinationals as they need to convert their weak foreign currency profits back into USD. The USD safe-haven trade may eventually trigger a broad and deep selloff in US stocks. As the USD continues to strengthen, corporate profits for US multinationals will shrink or disappear. US Multinational $1 Billion Revenue Example: $1 billion in revenue-generating a 15% net profit with a net neutral 0% currency translation equals a $150 million profit. $1 billion in revenue-generating a 15% net profit with a negative -15% unfavorable currency translation expense equals a $0 profit! In addition, the impact of inflation on the global consumer will lead to a pullback in consumer spending which will further reduce corporate revenues and profits. The combination of the global currency dislocation along with the economic cool off will bring on a global recession. The following chart by Finviz shows the percentage the USD has appreciated against all the major global currencies year to date: Let’s review a few of these primary currencies to get a better idea of how much capital is migrating out of each of these countries and into the US dollar.       CANADIAN DOLLAR LOSING -7.29% The Canadian Dollar CAD peaked in the first week of June 1, 2021. The Canadian economy has benefited greatly from soaring energy and commodity prices, strengthening metals markets, and strong real estate prices. But despite this economic strength capital is still migrating out of the CAD and into the USD. INVESCO CURRENCY SHARES • CANADIAN DOLLAR TRUST ETF • ARCA • WEEKLY SWITZERLAND FRANC LOSING -12.53% The Switzerland Franc CHF peaked in the first week of January 6, 2021. The CHF has long been considered a safe haven for global capital during times of risk-off global market stress. The primary factor hurting the CHF is its current fiscal policy and negative interest rate of -0.75%. Therefore, the USD is still the preferred safe-haven currency due to CHF’s negative rate. Capital continues to flow out of the CHF into the USD. INVESCO CURRENCY SHARES • SWISS FRANC TRUST ETF • ARCA • WEEKLY BRITISH POUND LOSING -13.87% The British Pound GBP peaked in the first week of May 24, 2021. The GBP was the primary global reserve currency in the 19th century and the first half of the 20th century. However, that status ended when the UK almost bankrupted itself fighting World Wars I & 2. Since that time the US dollar has replaced the GBP as the primary reserve currency. The USD has a similar interest rate to the GBP and is also benefiting from its strong presence in energy and commodity markets. Therefore, the GBP is experiencing capital flows out of its currency and into the USD. INVESCO CURRENCY SHARES • BRITISH POUND TRUST ETF • ARCA • WEEKLY JAPANESE YEN LOSING -23.76% The Japanese Yen JPY peaked in the first week of March 2, 2020. The JPY has also long been considered a safe haven for global capital during times of risk-off global market stress. However, the primary factor hurting the JPY is its current fiscal policy and negative interest rate of -0.10%. Therefore, the USD is still the preferred safe-haven currency due to the JPY’s negative rate. Capital continues to flow out of the JPY into the USD. INVESCO CURRENCY SHARES • JAPANESE YEN TRUST ETF • ARCA • WEEKLY How We CAN HELP YOU Navigate Current Market Trends At TheTechnicalTraders.com, my team and I can do these things to assist you: We reduce your FOMO and manage your emotions. We have proven trading strategies for bull and bear markets. We provide quality trades you can trust. We tell you when to take profits and exit trades. We save you time with our research. We provide above-average returns/growth over the long run. We have consistent growth with low volatility/risks. We make trading and investing safer, more profitable, and educational. Sign up for my free trading newsletter so you don’t miss the next opportunity! Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
The Commodities Feed: Anticipating LNG Strike Action and Market Dynamics

Philip Morris Buys Match, Fed Members Spills The Tea And Gold Price Nears Quite Low Values | Saxo Bank

Saxo Bank Saxo Bank 11.05.2022 17:29
Summary:  Global equity markets have bounced after the US briefly hit new cycle lows yesterday. One development at the margin that has helped is the sharp decline in longer bond yields, even as a couple of Fed members were out with hawkish comments. A strong 3-year US treasury auction showed strong demand. Elsewhere, gold remains under pressure and is on life support. The data focus today swings to the US and the release of April CPI data.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - the rebound in US equities succeeded closing above the prior session’s close but met resistance above the 12,500 level in Nasdaq 100 futures. However, this morning Nasdaq 100 futures continue to rally trading around the 12,450-level attempting to break above the 12,500 level again which is needed to close Monday’s selloff range. Sentiment is still weak but a pause in the momentum in US 10-year interest rates is providing some support to US equities in the short-term. Q1 earnings results yesterday confirmed the slowdown in gaming and cryptocurrency trading activity. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I). China’s A shares surged with ChiNext rising 4.3% and CSI300 up 2%. Electric equipment, semiconductors, EV battery, consumer electronics, wind and solar names led the charge higher. EV battery maker, CATL (300750) rose 7.7%. Hong Kong’s Hang Seng Index rose 1.7% and Hang Seng TECH Index gained 4.6% by mid-day.  After reporting better than market expected earnings and margin expansion, Li Auto (2015) surged 11%. The COVID related disruption to logistics and production, plus food and daily necessities stockpiling by households seems to make their impact felt on general price levels. China’s April PPI came at +8.0% YoY and CPI at +2.1% YoY, both higher than market expectations.   AUDUSD and USDCAD – the two key commodity currencies broke through key support against the US dollar this week, but so far the reaction to the development has been restrained and would likely take a further slide in risk sentiment, including in the commodity space for a notable extension lower. As the break levels remain nearby, the pairs deserve watching for the trend status and a possible reversal as well – resistance in AUDUSD is 0.7000-0.7050 and support in USDCAD comes in at 1.2900-50. Read next: Don't Worry Coffee Lovers! The Price Of Coffee Futures Falling Amidst Current Market Conditions, Crude Oil (WTI) Recovers Slightly, Palladium Prices Show Steady Downward Price Trend | FXMAG.COM USDJPY and JPY pairs – global sovereign bond yields have tumbled from their highs at the start of the week and crude oil has corrected sharply lower, two developments that support the Japanese yen, as Japan relies so heavily on energy imports and BoJ yield-curve-control policy means that the currency absorbs weakness when the domestic bond market is not “allowed” to. And yet, the JPY bounce on supportive developments has proven surprisingly muted – an opportunity or indication of further weakness to come? Watching for the reactivity in JPY pairs around the US CPI release today and 10-year US T-note auction later today as USDJPY is often one of the more sensitive currencies to US treasury yields. Gold (XAUUSD) dropped below $1850 support yesterday after several Fed officials backed multiple 50 basis point rate hikes. These comments helped drive fresh dollar strength and a continued rise in US real yields ahead of today’s US CPI print. Recent dollar strength, especially against the yuan and rupee has reduced demand from China and India, the world’s two biggest buyers of physical gold. With gold trading near a three-month low, demand for bullion backed ETFs has also ebbed with total holdings falling to a three-week low on Tuesday. Silver (XAGUSD) meanwhile slumped below previous support at $21.5, thereby adding an additional layer of weakness. From a technical perspective, the next key support level in gold is the 61.8% retracement of the March 2021 to March 2022 high at $1827. Crude oil (OILUKJUL22 & OILUSJUN22) traded higher in Asia with Brent bouncing before reaching key support below $100 per barrel. Catalyst for the move ahead of today’s US CPI print was a decline in the Covid19 infections in China providing some cautious optimism about a pickup in demand from the world’s largest importer. The cost of fuel due to lack of refinery capacity and sanctions against Russia remains very elevated with retail gasoline in the US hitting a record. The EIA meanwhile lowered its forecast for US production in 2022 and 2023 while Saudi Arabia and the UAE oil ministers warned that spare capacity is decreasing in all energy sectors. Developments that may offset any slowdown in global consumption due to lower growth and punitive high inflation. Monthly oil market reports from OPEC and IEA on Thursday. US Treasuries (TLT, IEF) – The US yield curve flattened sharply yesterday as hawkish talk from a couple of Fed members (see below) kept the shorter end of the yield curve elevated, while longer yields continued their sharp retreat ahead of a tone-setting 10-year T-note auction today, with the benchmark yield there trading just below 3.00%. The 3-year notes yesterday saw the strongest demand in over a year. What is going on? Fed officials continue to back rate hikes. Fed speakers are back on the wires backing multiple 50 basis point rate hikes, even as that might mean a bumpy ride for the economy and the markets. Cleveland Fed President Loretta Mester, in fact, also brought 75bps rate hikes back on the table for H2 if inflation doesn’t recede. US earnings recap. The big negative surprise was Coinbase reporting Q1 revenue of $1.17bn vs est. $1.48bn and a dark Q2 outlook expecting lower trading activity. Unity was in line with Q1 estimates but puts out a very low Q2 revenue figure of $290-295mn vs est. $360mn, but the fiscal year guidance is closer to consensus suggesting timing issues. Electronic Arts surprised investors given the weakness in gaming results recently guiding fiscal year 2023 (the company is not following the traditional calendar year) revenue a bit above consensus. Staying with gaming results, Roblox reported a slowdown in user activity (bookings) as so many other gaming companies have done in Q1. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Philip Morris to buy Swedish Match for SEK 106 per share. This is one of Europe’s largest transactions this year worth $16bn in an all-cash deal translating into a premium of 40%. Philip Morris is acquiring Swedish Match to get assets that are less about visual cigarettes to better cope with increasing regulation around the world against cigarettes. Declining Covid-19 cases in China helped boost sentiment across battered stock markets in Shanghai and Hong Kong overnight. The industrial metal sector has seen a sharp correction during the lockdown with the Bloomberg Industrial Metal Index currently up just 5% on the year after hitting a 39% gain on March 7. As lockdowns start to ease the focus across the sector is likely to return to tight global inventories and the prospect of a revival in demand with the Chinese government likely to initiate projects to support an economic revival. Six major mining companies who derive more than 60% of their revenue from copper have slumped between 25% and 50% from peaks achieved during the past year. What are we watching next? US CPI and 10-year T-note auction today. The 3-year T-note auction yesterday showed the strongest demand for 3-year US paper since early 2021. A 10-year T-note auction is set for today, with yields having retreated to near 3.00% from the highs earlier this week near the 2018 cycle high of 3.25%. Liquidity in the US treasury market is at its weakest levels since the pandemic-outbreak panic moment even before the Fed is set to begin reducing its balance sheet (requiring the market to absorb more treasury issuance). Reactivity in the US treasury market and the US dollar is also worth close observation today on the release of the April CPI data, expected to show the headline rising at only +0.2% MoM, but the core rising +0.4% MoM. The YoY expectations are +8.1%/+6.0% vs. +8.5%/+6.5% in March. EU gas prices jumped on Tuesday and may rise further today after Ukraine’s network operator warned Ukraine won’t accept gas at Sokhranivka, one of two cross-border points handling Russian flows, from today after occupying forces disrupted operation at the compressor station. It’s still possible for gas to be rerouted to the second entry point, Sudzha, allowing European contracts to be fulfilled, it said. How Gazprom reacts to these changes will set the tone in today’s trading. Dutch TTF benchmark gas briefly traded below its 200-day moving average support line at €89/MWh yesterday before ending the day near €100/MWH on the Ukraine news.  Earnings Watch. In Europe this morning the focus is on earnings from E.ON and Siemens Energy given the energy crisis in Europe. Genmab is also important to watch being one of Europe’s largest pure plays within the biotechnology industry. Later in the US session the focus is on Walt Disney given the latest weak results from Netflix and more reopening post the pandemic benefitting Disney’s physical entertainment assets. We will also watch Coupang, the largest e-commerce company in South Korea, given the bad Q1 results from most e-commerce companies. Today: Genmab, E.ON, Siemens Energy, Continental, Toyota, SoftBank, Takeda Pharmaceuticals, Delhaize, Mowi, Swedish Match, Walt Disney, Coupang Thursday: Verbund, KBC Group, Brookfield, Fortum, Siemens, Allianz, Merck, Hapag-Lloyd, RWE, Atlantia, Snam, NTT, SoftBank Group, Aegon, Naturgy Energy, Motorola Solutions Friday: Deutsche Telekom, KDDI, Honda Motor, Alibaba Economic calendar highlights for today (times GMT) 0715 – ECB's Nagel to speak 0800 – ECB President Lagarde to speak 0800 – ECB’s Vasle to speak 0830 – ECB's Makhlouf to speak 0850 – ECB's Knot to speak 1220 – ECB's Schnabel to speak 1230 – US Apr. CPI 1230 – US Apr. Real Average Hourly Earnings 1600 – US Fed’s Bostic (non-voter) to speak 1800 – US 10-year T-Note auction 2301 – UK Apr. RICS House Price Balance Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

FX Update: Bond rally supercharges JPY comeback rally. | Saxo Bank

John Hardy John Hardy 12.05.2022 16:01
Summary:  An extension of the rout in risky assets has continued to drive the US dollar higher against the smaller currencies and most G10 currencies as well, but the Japanese yen has not only taken on a new shine, but is even sharply stronger against the strong US dollar as global bonds have suddenly rediscovered their safe haven appeal. Elsewhere, HKD is worth watching as the HKMA intervened for the first time of this cycle to maintain the top of the USDHKD band. FX Trading focus: JPY woke up and smelled the coffee. Watching HKD as USD presses upper level of USDHKD band. The JPY upside potential has been more fully realized since yesterday on the heavy weight of falling yields in global sovereign bond, which are finally serving their function as a go-to safe haven in an environment of generally risk deleveraging. The JPY is even handily outpacing the ongoing strength in the US dollar as the yield focus dominates. And the technical damage in JPY crosses is spreading: NZDJPY and GBPJPY, the latter our focus yesterday, are already trading back into old ranges that preceded the JPY sell-off sparked by the commodity rally in the wake after Russia invaded Ukraine. Now watching AUDJPY and EURJPY for whether the feat is repeated there (key levels around 86.00 and 134.00, respectively), and CNHJPY has come down hard, with more to come. More thoughts on the most important USDJPY pair below in the chart discussion. The JPY can continue higher, but the price is far “fairer” now relative to long term bond yields. Yields must extend lower still, possibly with a helping hand from crude oi and LNG prices for a full reversal of the JPY sell-off since late February.  Chart: USDJPYYesterday, our focus in JPY crosses was on GBPJPY, which took out the 160.00 and 158.00 area supports yesterday. Today we have a look at the big one: USDJPY and what levels might trigger a more notably slide. Arguably, the first of these has already been under strain today in the 128.50 area. Regardless, the direction of the US 10-year benchmark yield is the key coincident indicator, with global energy prices a secondary indicator. The next support area below is the 127.03 pivot low followed perhaps by the 125.00 area, which was a stopping point on the way up. Source: Saxo Group Sterling suffered a sell-off to new lows in the wake of the Q1 GDP data, which showed a +8.7% growth rate, slightly below expectations, but a -0.1% month-on-month figure for March, with weak production figures to boot. The March Trade Balance data was also out and showed a toe-curling negative £23.8B trade balance, a staggering figure. Still, after a run to fresh lows against the G3 currencies, the EURGBP rally reversed rather sharply, in part as EURUSD tipped over to new lows after a couple of weeks of defending the 1.0500 support area. All traders should monitor the crypto situation as a possible aggravator of additional volatility risk across markets. The TerraUSD “stable coin” broke its parity level with the US dollar earlier this week and traded as much as 70% below par. Then yesterday, a key Bitcoin support level at 30,000 broke, possibly inspiring the instability of the Tether stable coin, which is a commonly used as a kind of parking space between going in and out of crypto trades and in and out of the crypo market itself. The Tether coin traded as much as 5% below par against the US dollar this morning before the whole crypto-complex recovered. More directly pertinent to FX, we have to watch the Hong Kong dollar (HKD), as the USD strength has taken the USDHKD exchange rate to the upper limit of its band at 7.85 and has seen the Hong Kong Monetary Authority out intervening for the first time of this cycle overnight. The HKMA will also need to copy Fed policy to avoid the worst of pressure on the HKD, even with Hong Kong’s economy in a funk. The HKD band is one of those legacy set-ups that makes little sense here almost forty years after its creation, but Hong Kong remains a key gateway into and out of the mainland Chinese economy, and China probably doesn’t want to add HKD instability to its long list of challenges. Note the Chinese demand concerns continuing to weigh on the copper price, which has punched to the lowest reaches of the range since early 2021. This in turn weighs on the Aussie, which itself has punched to new lows for the cycle. The CAD has gotten off easy so far by comparison, perhaps as oil prices remain in the higher range here – but after breaking above resistance, if USDCAD loses its tethering to the 1.3000 area it is in danger of a sharp extension higher. Table: FX Board of G10 and CNH trend evolution and strength.We have noted the euro resilience of late, but signs of this crumbling today as EURUSD, EURCHF and especially EURJPY come under pressure. But the development of note here is the strong revival of the JPY momentum and outright positive trend measurement in recent days. Elsewhere, CAD looks too strong with this backdrop, although there is quite a race to the bottom of late among the weakest horses in G10 FX. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note EURJPY and CADJPY trying to join other JPY crosses in flipping to the negative side after the sharp JPY rally today. All G10 currency pairs save for a few GBP pairs (due to Brexit-related events) are in the highest 10% of their ATRs of the last 1000 trading days, as shown in the dark orange shading for the ATR readings. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. PPI 1230 – US Weekly Initial Jobless Claims 1800 – US 30-year T-Bond auction 1800 – Mexico Overnight Rate Announcement
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

(USD/CAD) - Strong Performance Of Canadian Dollar - CAD rallies on US consumer confidence | Oanda

Kenny Fisher Kenny Fisher 16.05.2022 18:04
The Canadian dollar is unchanged on Monday, as it trades at the 1.29 line. Weak US consumer confidence boosts Canadian dollar The Canadian dollar ended the week in splendid fashion, with gains of over 1 per cent. This marked the Canadian dollar’s best one-day performance this year and recovered all of the week’s losses. The strong gains were driven by a disappointing UoM Consumer Sentiment index for May, which dropped to 59.2, down sharply from 65.2 in April and the lowest since October 2011. Just one year ago, the index was 82.8, indicative of a massive erosion in the confidence levels of the US consumer. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM Consumers were more pessimistic about current and future expectations, and inflation expectations remained at 5.4% for a third straight month, a 40-year high. A fall in consumer confidence has so far not spilled over to consumer spending, but soaring inflation could cause consumers to cut back on spending, which would hurt economic growth. Canada posted some solid numbers earlier today, although that wasn’t enough for the Canadian dollar to extend Friday’s impressive gains. Housing Starts and Wholesale Sales improved and were stronger than expected. Manufacturing Sales rose 2.5% in March, crushing the estimate of 1.7%. Oil and metal sales rose, reflective of high commodity prices, which is bullish for the commodity-based Canadian dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Canada’s tightening job market is putting further pressure on the Bank of Canada to raise rates at a faster pace than expected. The benchmark rate is currently at an even 1.00%, after the 0.50% hike in April. Governor Macklem has hinted that he could deliver more 0.50% hikes and we could see rates rise to 2% by the end of Q2. Macklem has signalled the rate-hike cycle could be very aggressive, saying that he will lift rates above 3% if necessary, in order to beat back spiralling inflation. USD/CAD Technical USD/CAD is testing resistance at 1.2962. Above, there is resistance at 1.3023 There is support at 1.2848 and 1.2787   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
USD/CAD hits 1.3000 on weak oil price ahead of Fed's Powell Testimony and CPI Data Release | ICM.COM

Canadian dollar eyes CPI | Oanda

Kenny Fisher Kenny Fisher 18.05.2022 15:12
The Canadian dollar has looked sharp, taking advantage of recent US dollar weakness. USD/CAD barrelled past the 1.30 line on Thursday, but the Canadian dollar has rallied and is currently trading at 1.2830. Has Canada’s inflation peaked? Investors are keeping both eyes on Canada’s April inflation report, which will be released later today. On a monthly basis, the markets are expecting a significant drop – headline CPI is expected at 0.5% (1.4% prior) and core CPI is projected at 0.4% (1.0% prior). If the readings are within expectations, we can expect some headlines trumpeting that inflation has peaked. I would argue that it would be premature to declare that inflation is easing based on a single reading. Still, the CPI release could be a market-mover. If inflation is weak, the markets may expect the BoC to be less aggressive in its rate hiking stance and that could send the Canadian dollar lower. Conversely, a stronger than expected CPI would likely send the Canadian currency higher. The BoC raised rates by 0.50% in April, and there is strong pressure to deliver another 0.50% hike at the June 1st meeting, especially if inflation is higher than expected. The US dollar lost ground overnight, even though US Treasury yields moved higher and Fed Chair Powell said rates could rise above the terminal rate (around 3.50%) in order to contain inflation. Former Fed Chair Ben Bernanke weighed in on Fed policy, saying that the central bank waited too long to respond to inflation. Bernanke warned that he expected to see stagflation in the next year or two. Despite the talk of recession and stagflation, the US posted strong numbers on Tuesday, led by retail sales. The headline reading came in at 0.9% and core retail sales at 1.0%, as both beat the estimates. Consumers are in a spending mood, despite a weakening in consumer confidence. If inflation doesn’t show signs of easing in the next few months, consumers might reduce spending, which could dampen economic growth. . USD/CAD Technical USD/CAD is testing resistance at 1.2848. Above, there is resistance at 1.2962 There is support at 1.2787 and 1.2673 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
GBP: Softer Ahead of CPI Risk Event

FX Update: Powell brings back the hike-until-it-breaks narrative. | Saxo Bank

John Hardy John Hardy 18.05.2022 15:57
Summary:  After the odd tapping on the brakes at the May 4 FOMC meeting, when the Fed wanted to take the idea of 75-basis point rates off the table, Fed Chair Powell reminded the market of its mission to ensure that it will not let up on policy tightening until it has achieved a sustained drop in inflation. Elsewhere, the sterling squeeze is fading fast and the status of key USD charts is pivotal. FX Trading focus: Powell puts back on the hawkish hat, GBP squeeze fading fast, USDCAD spotlight Fed Chair Powell reminds us of the Fed’s mission in saying that the Fed “won’t hesitate at all” to take the Fed Funds rate above neutral, and that “what we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that.” Powell admitted that taking levels above neutral could bring some pain and a rise in the unemployment rate. End-2022 Fed expectations rose about 10 basis points yesterday and this morning were at 2.82%, just shy of the 2.88% cycle highs from before the May 4 FOMC meeting, at which Powell discouraged the idea of hiking more than 50 basis points at a time (why?). This only offered the USD a modicum of support overnight as risk sentiment absorbed the news without much fuss. GBP shorts caught in quite the squeeze yesterday, likely aggravated badly by positioning, which is quite heavily bearish in the US futures market and in general. Yesterday I mentioned the very strong payrolls data as a driver, but there was also the news that the UK government may be considering tax cuts, including a lowering of the VAT, as well as cost-of-living support for the most vulnerable citizens. In the first instance, this could eventually help ease inflation levels and thus allow the Bank of England to hike more than previously expected, but the follow-on thinking is that it could also keep demand higher than it would be otherwise and continue to driver extreme external deficits for the UK, eroding the sovereign UK balance sheet and therefore possibly trust in sterling as well. Sterling has surrendered much of yesterday’s gains – watching for a capitulation again in GBPUSD, while the EURGBP has bounced back above the existential 0.8450 area that  was pivotal on the way up. A very choppy chart there. USDCAD and US vs. Canada Housing spotlightThe CAD has received a double dose of support from the recent strong bounce in risk sentiment and crude oil prices pulling into the top of the range and beyond at times recently. But let’s look a bit further ahead at the inevitable gathering storm that is set to hit the housing market in coming months, after yields have lurched sharply higher. The headline is that if an ugly housing slowdown lies ahead, it will hit Canada’s economy with far more force than it will the US economy. Construction itself contributes about 75% more to GDP in Canada than the US (about 7.5% vs. 4.3%), and private balance sheets in Canada are far more levered, with notable local housing bubbles in Toronto and Vancouver making UBS world top ten list (at #2 and #6) of worst housing bubbles in 2021. The Greater Toronto area, by the way, represents over 17% of the Canadian population. I have better data on the US market and can see solidifying signs in leading indicators that the US housing market is set for a slowdown, including yesterday’s worst of the cycle drop in the NAHB for the May data point, which fell 8 points to 69 versus 75 expected and 77 in April. The latest Housing Starts and Building Permits data is up today (for April), although this lags the NAHB historically by about six months in directional terms. US Pending home sales have also rolled over as discussed in today’s Saxo Market Call podcast and are another leading indicator. So, while near term, an additional boost to sentiment and energy prices could see a break-down in USDCAD, the Canadian economy will face disproportionately large end-of-cycle pressures once the recession arrives, so clouds remain over the cycle outlook for the loonie. Chart thoughts below for USDCAD Chart: USDCADThe USDCAD chart has retreated to critical levels for bulls, as a significant punch below 1.2800 makes the chart look a lost cause for the bulls (arguably, the last, last gasp area is just ahead of 1.2700 at the prior pivot lows or even 1.2660 if using the 61.8% retracement and the 200-day moving average, although the reversal back down through 1.2900-50 has already been a disappointment after that level to the upside was broken. An impulsive recovery back above 1.3000 to put the momentum back on track higher. Source: Saxo Group Underwhelming wage price data for Q1 from Australia overnight, which rose a mere 0.7% QoQ and 2.4% YoY, both 0.1% below expectations. This is meant to be the key data that would drive the RBA to accelerate its tightening regime if it provided evidence of a wage price spiral. Alas, the AUD seems more focused on hopes for China lifting Covid restrictions and swings in risk sentiment. The 0.7000-0.7050 zone remains the tactical resistance focus, with bears possibly needing to retreat back to 0.7200-50 if it does not hold. Table: FX Board of G10 and CNH trend evolution and strength.The USD is losing steam in a trending sense, and would need a solid new impulsive move higher soon to avoid a further breakdown in key pairs, and versus the G10 currencies generally. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.USDCAD is on the verge of flipping into a positive territory on the trend readings if it can’t rally soon. Also note the EURGBP rally hanging on by a thread here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. Housing Starts and Building Permits 1230 – Canada Apr. CPI 1230 – Canada Apr. Home Price Index 2000 – US Fed’ Harker (Non-voter) to speak 2350 – Japan Apr. Trade Balance 0130 – Australia Apr. Employment Data Source: Saxo Bank
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

Will US Dollar To Canadian Dollar (USD/CAD) Plunge? Canadian dollar (CAD) eyes retail sales | Oanda

Kenny Fisher Kenny Fisher 26.05.2022 15:48
The Canadian dollar is drifting just above the 1.28 line, but that could change in the North American session, with the release of Canada’s retail sales for March. The headline figure is expected to jump to 1.4% MoM, after a negligible gain of 0.1% in April. Core retail sales is projected to come in at 2.0%, little changed from the previous reading of 2.1%. A stronger-than-expected reading would likely boost the Canadian dollar, while an underperforming release would raise questions about the recovery and could push the currency lower. FOMC minutes soothe market nerves The FOMC minutes, released on Wednesday, didn’t contain any surprises, which was just fine as far as the markets were concerned. Investors have become increasingly nervous over the spectre of a recession in the United States. Recent data is pointing to a possible slowdown, at the same time that the Federal Reserve has embarked on an aggressive rate-hike cycle which will slow the economy. With inflation still not showing signs of peaking, there have been calls from some Fed officials to deliver a super-super-size 75 bps hike. To the relief of the nervous markets, the minutes appeared to put to rest that drastic scenario, as the Fed signalled that it will hike by 50 bps in June and July, followed by a pause in September. This would allow the Fed to monitor the effects of the June and July hikes on the economy and whether inflation is finally easing. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM The US dollar showed modest gains after the minutes were released, but we are seeing limited movement across the majors today. The dollar index rose slightly to 102.07, but has retreated to 101.83, as resistance at the multi-year breakout line of 102. 35 held firm. There is support at 101.50 and 101.00. USD/CAD Technical There is resistance at 1.2866 and 1.2955 USD/CAD has support at 1.2750 and 1.2661 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

USD/CAD: Loonie (Canadian Dollars) Yields To US Dollar Amid Hawkish Fed (Federal Reserve) | InstaForex

InstaForex Analysis InstaForex Analysis 10.06.2022 14:24
Relevance up to 11:00 2022-06-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Interesting events are taking place around the USD/CAD pair. The Canadian dollar has been steadily strengthening for almost four weeks amid the strengthening of the oil market and the hawkish mood of the Bank of Canada. Since May 13, the loonie has risen by 500 points, reaching a two-month low (1.2516) on June 8. However, USD/CAD bears could not enter the area of the 24th figure. The day before yesterday, the pair turned 180 degrees and soared sharply, rising by more than 200 points in two days. This price spurt is primarily due to the strengthening of the US currency. The Canadian dollar could not hold back the onslaught of the dollar bulls, but there was no clear informational reason for the weakening of the loonie. Obviously, the greenback plays the role of the first fiddle in the USD/CAD pair, so the further prospects of the loonie depend on the behavior of the US currency.     Note that following the results of the June meeting, the Canadian regulator raised the interest rate by 50 basis points, thereby realizing the most expected scenario. But at the same time, the Bank of Canada maintained a hawkish attitude and announced further tightening of monetary policy. The rhetoric of the head of the Canadian central bank allowed the USD/CAD bears to increase pressure on the pair. In the text of the accompanying statement, the regulator indicated that in the second quarter, the country's economic growth "will be quite strong," given the steady consumer spending, as well as the strengthening of exports. Analyzing the results of the June meeting, most experts came to the conclusion that in July the regulator will also raise the interest rate by 50 basis points. On these rails of a fundamental nature, the loonie dropped to the bottom of the 25th figure. It should be noted here that the Canadian dollar is a worthy competitor to the US currency: the loonie often rose in price even against the background of a general strengthening of the greenback. In my opinion, the main reason for this stress resistance of the Canadian lies in the actions of the Bank of Canada. Recall that last year the Canadian regulator showed a combative character, outstripping even the US Federal Reserve in this regard. Firstly, the BOC began to reduce QE in the first half of last year (becoming the first of the G7 central banks to begin gradually curtailing anti-crisis measures). In October 2021, the regulator announced the early completion of the incentive program. As you know, the Fed members made a similar decision on the early curtailment of QE only a month later—at the November meeting. Then the Federal Reserve and the Canadian regulator, so to speak, went level, systematically tightening their rhetoric and monetary policy parameters. Central banks raised the interest rate in March and declared further steps in this direction. Therefore, for a long time, the loonie did not succumb to the onslaught of dollar bulls, using any weakening of the greenback in his favor. To date, the situation has changed somewhat. There has been increasing market speculation that the Fed will raise interest rates in 50-point increments at every meeting this year. Nearly 70% of economists surveyed by Reuters said the Fed would pause rate hikes in the first or even second quarter of next year. Some representatives of the Fed indirectly confirm these assumptions. In particular, Fed Board member Christopher Waller said earlier this week that he supports raising interest rates by 50 basis points "in the next few meetings." Fed Vice Chair Lael Brainard also said that the regulator is not going to stop there, as "the number one priority is to reduce inflation." St. Louis Fed President James Bullard (who also has the right to vote this year) recently repeated his thesis, pointing out that the Fed needs several 50-point rate hikes. The Bank of Canada is currently unable to demonstrate such decisiveness: the event horizon here is limited to the July meeting, at which the central bank is likely to raise rates by 50 points. However, future prospects are still rather vague. Thus, the USD/CAD pair was able to turn 180 degrees mainly due to the strengthening of the hawkish mood regarding the Fed's next steps. The Canadian regulator has already said its word, while the American central bank still retains a certain intrigue. The US dollar retains the potential for its further strengthening. From a technical point of view, the USD/CAD pair is currently testing the middle line of the Bollinger Bands indicator on the D1 timeframe (1.2720). Most likely, traders will overcome this price barrier, given the strength of the upward movement. The next upward target is 1.2790, which is the upper boundary of the Kumo cloud on the same timeframe. Overcoming this target will open the way for USD/CAD buyers to the area of the 28th figure.   Read more: https://www.instaforex.eu/forex_analysis/313102
Tuesday's EUR/USD Analysis: Chaotic Movements on 30M Chart

1 USD To CAD: What's Ahead USD/CAD? The US Inflation And Canadian Job Report | Oanda

Kenny Fisher Kenny Fisher 10.06.2022 14:08
The Canadian dollar has extended its losses today. USD/CAD is trading at 1.2743, up 0.35% on the day. Thursday saw the US dollar gives its Canadian cousin a spanking, as USD/CAD jumped 1.13%, its highest daily gain this year. A rise in US Treasury yields helped boost the US dollar, as the 10-year yield remains above 3%. As well, US unemployment claims disappointed, rising to 229 thousand. This was higher than the previous release of 202 thousand and above the estimate of 210 thousand. The rise in claims was not massive, but nonetheless has fed into the market’s nervousness over the US economy, and the result was a drop in risk appetite which sent the Canadian dollar tumbling lower. It could be a busy end to the trading week, with Canada’s employment report and US inflation on today’s schedule. Canada’s job numbers for May are expected to be solid – the economy is projected to have created 30.0 thousand new jobs, up from 15.3 thousand in April. The unemployment rate is forecast to remain unchanged at 5.2%. All eyes on US inflation The highlight of the week will be US inflation for May. Headline inflation is expected at 8.3% (unchanged), while Core CPI is forecast to fall to 5.9%, down from 6.2%. If inflation does indeed drop, there will likely be voices proclaiming that the long-sought inflation peak is finally here. It would, however, be premature to assume that inflation is on a downswing based on one reading alone. Still, there is plenty of anticipation around the inflation release, such that it could be a binary outcome for USD/CAD – if inflation outperforms, Fed hiking expectations will rise. If, however, inflation drops, we could see a move to sell US dollars. . USD/CAD Technical USD/CAD is testing resistance at 1.2703. Above, there is resistance at 1.2812 There is support at 1.2628 and 1.2519   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Markets eye Canadian job report, US inflation - MarketPulseMarketPulse
Markets May Shock You Today! FX: EUR/USD & USDCAD, DAX (GER 40) And FTSE (UK 100) - Daily analysis by DayTradeIdeas - 20/06/2022

Markets May Shock You Today! FX: EUR/USD & USDCAD, DAX (GER 40) And FTSE (UK 100) - Daily analysis by DayTradeIdeas - 20/06/2022

Jason Sen Jason Sen 20.06.2022 08:05
EURUSD recovery from the May low of 1.0360/50 leaves a potential double bottom buy signal although on Friday we made a high for the day at 1.0545/55. Above here today retests Thursday's high at 1.0660/62 then last week's high at 1.0640/42. Minor support at 1.0460/50. Below 1.0330 risks a retest of the double bottom low at 1.0360/50. Longs need stops below 1.0325. USDCAD clearly at the upper end of the 1 year range as we retest the May high at 1.3060/80. This will be key to direction for this week. Probably worth trying a short with stop above 1.3100. A break higher however targets 1.3160/70 & 1.3240/60. Shorts at 1.3060/80 target 1.3030/20 & 1.3000/1.2990. Expected good support at 1.2955/35 for today. Dax looks likely we can hold important longer term support at 13250/150 for a bounce to 13360/380 then 13500 & resistance at 13600/650. We have a gap to fill at 13730/750. A break above here is anther buy signal. A break below 12950 is a very important medium term sell signal initially targeting 12700/600 before a retest of the March low at 12450/425. FTSE broke lower to the next target of 7000/6990 last week, holding just 56 ticks above very strong support at 6940/10. Longs here this week need stops below 6870. The bounce on Friday held 8 ticks from strong resistance at 7120/40. Shorts need stops above 7160. A break higher is a buy signal targeting 7240/50, perhaps as far as strong resistance at 7300/20. To receive this report every morning please subscribe at our website www.daytradeideas.co.uk or email jason@daytradeideas.co.uk
The Pound (GBP) Will Probably Continue To Move Sideways

What Helps GBP (British Pound)? Canadian Dollar (CAD) Influenced By Interest Rate Hike | Orbex

Jing Ren Jing Ren 14.07.2022 11:06
GBPUSD sees limited bounce The pound finds support from better-than-expected GDP growth in May. The pair is having a hard time holding onto its rally attempts. Bearish sentiment means that rebounds have rather been opportunities for trend followers to sell into strength. The RSI’s double bottom in the oversold area caught some buyers’ attention. But strong selling could be expected between the psychological level of 1.2000 and 1.2050. 1.1810 is a fresh support and its breach could trigger a new round of liquidation towards 1.1600. USDCAD hits resistance The Canadian dollar soared after the Bank of Canada surprised the market with a 1% hike. The greenback consolidated its gains after it broke above June’s peak at 1.3070. 1.2940 at the base of a previous bullish breakout has offered some support, though its retest is a sign of hesitation. 1.3050 is the last hurdle ahead and a bullish breakout may attract momentum buyers and resume the uptrend. On the downside, a fall below 1.2940 may cast doubt on the bulls’ commitment and deepen the correction to 1.2840. XAUUSD attempts to rebound Gold recouped some losses after the US dollar bulls took profit following inflation data in June. The price action has struggled to stay above September 2021’s lows at 1723. A bullish RSI divergence showed a slowdown in the sell-off. A rally above 1750 would act as confirmation and prompt sellers to cover their bets, paving the way for an extended recovery. Then 1805 along the 30-day moving average could be within reach. A drop below 1710 may attract more bears and send the metal to August 2021’s lows near 1682.
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

BoC Move Was Unexpected And Record-Breakin A Technical Look At USD/CAD

Kenny Fisher Kenny Fisher 14.07.2022 14:56
The Canadian dollar has posted sharp losses on Wednesday. In the European session, USD/CAD is trading at 1.3132, up 1.18%. BoC shocks with 100bp salvo The Bank of Canada has been in an aggressive mode, but nobody was expecting the massive 100bp hike on Wednesday, the largest rate increase in 24 years. The markets had priced in a 75bp move, and the Canadian dollar responded with modest gains. The cash rate now stands at 2.5%. The massive increase shows that the BoC is pulling out all the stops in order to curb hot inflation, which has hit 7.7%, a 39-year high. The BoC is well aware that over-tightening could tip the economy into a recession, but this is the price to pay to ensure that inflation does not become entrenched through wage gains and price increases. Consumers and businesses are expecting high inflation to persist, and this can become a self-fulfilling prophesy and lead to even higher inflation. Along with the huge rate hike, the BoC had some grim news. The central bank raised its inflation forecast, which is expected to hit 8 per cent in the second and third quarters of this year. Growth is forecast to fall to 3.5% this year, down from 4.2% previously. The Canadian dollar wasn’t able to hold onto yesterday’s gains and has dropped sharply today. Investors remain risk-averse after the US inflation report, as headline CPI jumped to 9.1% YoY, up from 8.8%. Core CPI dropped a notch from 6.0% to 5.9% but this didn’t ease the disappointment that the inflation peak remains as elusive as ever. The inflation report has dramatically elevated the likelihood of a massive 100bp, which according to the CME’s FedWatch stands at 84% – less than a week ago, the likelihood of a 100bp move was a mere 7%. USD/CAD Technical USD/CAD has broken above resistance at 1.3068 and 1.3129. Above, there is resistance at 1.3199 There is support at 1.2953 and 1.2822 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar slides post-BoC - MarketPulseMarketPulse
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

FX: What Could Drive USD/CAD (US Dollar To Canadian Dollar)?

Kenny Fisher Kenny Fisher 13.07.2022 21:30
USD/CAD is trading quietly at the 130.00 line, with a busy day ahead. The Bank of Canada holds its rate meeting and the US posts the June inflation report. Bank of Canada could deliver 75bp salvo The Bank of Canada is expected to press the pedal to the gas later today, with the markets expecting a supersize 75bp hike. This would bring the cash rate to 2.25%. Similar to the Fed, the BoC is showing that it can be aggressive with its rate policy as it pulls out all the steps to curb enemy number one, which is runaway inflation. In May, Canada’s inflation rate rose to 7.7%, a four-decade high. Inflationary pressures have been broad-based, raising fears of inflation expectations becoming unanchored. A massive 75bp move by the BoC should give a boost to the Canadian dollar, but the gains could be modest if the market has fully priced in the move. As well, today’s US inflation report could affect the direction of USD/CAD in the North American session. In the US, the June inflation report is being eagerly anticipated by the financial markets. Headline inflation is expected to rise to 8.8% YoY, up from 8.6% in May. Core CPI is expected to ease to 5.8%, down from 6.0%. If the numbers are higher than expected, market reaction will be negative and the dollar should get a boost. Conversely, if inflation is lower than expected, it will raise hopes that inflation has peaked, raising risk sentiment and likely pushing the dollar lower. The inflation report could play an important role in Fed decision-making ahead of the July 27th rate meeting. The Fed is widely expected to hike by 75bp at the meeting, but could consider a smaller hike if inflation is weaker than expected, which would make the US dollar less attractive to investors. . USD/CAD Technical USD/CAD has support at 1.2953 and 1.2822 There is resistance at 1.3068 and 1.3199   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar eyes BoC, US inflation - MarketPulseMarketPulse
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Both The USA And Canada Release Labour Market Data | USD/CAD Chart

Kenny Fisher Kenny Fisher 05.08.2022 14:41
US nonfarm payrolls expected to slow to 250K It’s a busy day in both Canada and the US, with both countries releasing July employment reports. It wasn’t so long ago that US nonfarm payrolls was eagerly anticipated and was the most important event of the week. The NFP often had a significant impact on the movement of the US dollar. That has changed in the new economic landscape of red-hot inflation and central banks raising interest rates practically every month. The NFP has been overshadowed as the media breathlessly reports new inflation records and the threat of a recession. Still, the NFP remains an important indicator and a surprise reading can still shake up the markets. The July NFP is expected at 250 thousand, following a surprisingly strong June release of 372 thousand. A weak reading will raise concerns about a recession, which would likely see US yields and the US dollar fall. Conversely, a stronger than expected number would probably boost yields and the US dollar, as a stronger labour market would allow the Fed to remain hawkish regarding rate policy. The markets have priced in an inflation peak and the Fed winding up its rate-tightening cycle, which has sent the US dollar on a hasty retreat. Fed policy makers have been pushing back, sending out the message this week that there are more large hikes on the way as inflation is not yet under control. A strong NFP reading would reinforce the Fed’s message and provide some support for the US dollar. Canada will also publish employment data later today. The economy is expected to have created 20.0 thousand jobs in July, after a decline of 43.2 thousand in May. A stronger-than-expected reading should boost the Canadian dollar, while an underperformance could result in the currency losing ground. As well, Canada releases Ivey PMI. The indicator slumped to 62.2 in June, down from 72.0, and is expected to slow to 60.3. A surprise reading could have an impact on the direction of USD/CAD in the North American session. . USD/CAD Technical USD/CAD is putting pressure on 1.2899. Above, there is resistance at 1.3002 USD/CAD has support at 1.2741 and 1.2686 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD eyes Canada, US job reports - MarketPulseMarketPulse
China's Deflationary Descent: Implications for Global Markets

Dollar (USD) Comes Back? Latin America's Currencies Perfomance

Marc Chandler Marc Chandler 16.08.2022 10:58
The bullish dollar narrative was fairly straightforward  Yes, the US main challengers, China and Russia, have been hobbled in different ways by self-inflicted injuries. Still, the driver of the dollar was the expected aggressive tightening by the Federal Reserve. The market accepted that after being a bit slower than ideal (though faster and before many other large central banks), the Fed would move forcefully against inflation, even if it diminished the chances of an economic soft-landing.   However, now the market seems to have a different reaction function  The euro was impressively resilient after the job growth of more than twice expectations. However, the softer than expected US CPI sent the dollar broadly lower, inflicting some apparent technical damage to the charts.  We are reluctant to chase the dollar lower and impressed in a week that the US reported a decline in CPI and PPI that the 10-year bond yield closed a few basis points higher and the first back-to-back weekly increase in two months Technically, it seems that the dollar's pullback, nearly a month-old, move is getting maybe getting stretched. We will try to identify levels that could confirm another leg lower and what would suggest the US dollar may snap back.   Dollar Index:   After reaching almost 107.00 after the stronger than expected jobs data, the Dollar Index fell to almost 104.65 in response to the softer than expected CPI. It was the lowest level since the end of June. The MACD is still falling but oversold. The Slow Stochastic looks poised to turn lower from the middle of the range. Nevertheless, we like it higher in the coming days. We target 106.30 and then 107.00. A move above 107.50 could signal a return to the highs near 109.30 from mid-July. That said, a close below 105.00 would boost the risk of another leg lower.  Euro:  The euro rallied strongly after the softer US CPI, but a key trendline drawn off the February, March, and June highs begins the new week near $1.0375 remains unchallenged. Although the momentum indicators allow for additional gains, we look for the euro to push lower in the coming days. Only a move above the trendline would give it new life. We think the greater likelihood is for the single currency to initially ease toward $1.0180-$1.0200. It may take a break of $1.01 to signal a return to the 20-year low set in mid-July near $0.9950. The US two-year premium over Germany narrowed every day last week for a cumulative 11 bp to near 2.66%. Italy's premium over Germany was trimmed by six basis points. It was the third week of convergence, but at 0.75%, it is still nearly twice what it was in June. Japanese Yen:  The greenback was pushed away from JPY135 by the decline in US rates after the CPI figures. It was sold to about JPY131.75, holding above the month's low set on August 2 near JPY130.40. However, US rates closed firmer on the week despite three softer-than-expected price reports (CPI, PPI, and import/export prices). As a result, the greenback looks poised to test the JPY135.00-50 ceiling. A move above JPY136 would target the JPY137.50 area. We have emphasized the strong correlation between changes in the exchange rate and the US 10-year yield. That correlation is off its highs though still above 0.50, while the correlation with the US two-year yield has risen toward 0.65, the highest in five months.  British Pound:   Sterling rose to $1.2275 in the broad US dollar sell-off in the middle of last week. It stalled in front of the high set on August 2, a little shy of $1.23. This sets up a potential double top formation with a neckline at $1.20. A break would re-target the two-year low set in July near $1.1760. The MACD is set to turn down. The Slow Stochastic is going sideways in the middle of the range after pulling back earlier this month. Sentiment seems poor, and in the week ahead, the UK is expected to report some easing in the labor market, accelerating consumer prices, and another decline in retail sales. Canadian Dollar:   The US dollar fell to near a two-month low last week slightly below CAD1.2730, and slipped through the 200-day moving average on an intraday basis for the first time since June 9. The test of the (61.8%) retracement of this year's rally (early April low ~CAD1.2400 and the mid-July high ~CAD1.3225) found near CAD1.2715 was successful. The US dollar recovered ahead of the weekend back to the CAD1.2800 area. Although the momentum indicators give room for further US dollar losses, we suspect a near-term low is in place and look for an upside correction toward CAD1.2850-CAD1.2900. The Canadian dollar remains sensitive to the immediate risk environment reflected in the change in the S&P 500. The correlation over the past 30 sessions is a little better than 0.60. The correlation reached a two-year high in June near 0.80. The exchange rate's correlation (30 sessions) with oil prices (WTI) set this year's high in early August near 0.60. It is now slightly below 0.50.  Australian Dollar:   Although our bias is for the US dollar to correct higher, the Aussie does not line up quite as well. It broke above the high set at the start of the month near $0.7050 and has held above it. However, its surge stalled slightly above $0.7135, and it consolidated in a narrow range around $0.7100 ahead of the weekend. The momentum indicators are constructive. The main hurdle is the 200-day moving average near $0.7150 and the (50%) retracement of this year's decline (~$0.7660 in early April and ~$6680 in mid-July) found near $0.7170. A break of this area could see a return to the June high by $0.7285.   Mexican Peso:   Latin American currencies had a good week, except for the Argentine peso, which fell by more than 1%, for the dubious honor of being the poorest performer in the emerging markets. Led by Chile (+3.9%) and the Colombian peso (3.8%), Latam currencies accounted for half of the top five performers last week. The peso's 2.7% gain was its best in five months, and the dollar was sold a little through MXN19.85, its lowest level since late June when it reached almost MXN19.82.There seems little to prevent a move toward MXN19.50. Any worries that AMLO's appointments to the central bank would block aggressive tightening of monetary policy must have evaporated as Banxico demonstrated a resolve to hike rates and shadow the US.  Chinese Yuan:   The yuan took a step lower from mid-April until mid-May. Since then, it has been trading within the range more or less seen in the second half of May. That dollar range is roughly CNY6.650 to CNY6.77. For the past month, the dollar has traded between CNY6.72 and CNY6.78, fraying the upper end of the broader range after the greenback surged broadly after the US employment data. Policymakers have signaled concern about inflation and its reluctance to ease monetary policy. It would seem the domestic policy efforts might favor a firm yuan.     Disclaimer   Source: Is the Dollar's Month-Long Pullback Over?
USA: People Are Not Interested In Buying New Houses! Equities Are Still Trading High As The Hopes For Iran Nuclear Deal Are Still Alive

USA: People Are Not Interested In Buying New Houses! Equities Are Still Trading High As The Hopes For Iran Nuclear Deal Are Still Alive

Saxo Strategy Team Saxo Strategy Team 16.08.2022 14:00
Summary:  Equities traded higher still yesterday as treasury yields fell further back into the recent range and on hopes that an Iran nuclear deal will cement yesterday’s steep drop in oil prices. The latest data out of the US was certainly nothing to celebrate as the July US Homebuilder survey showed a further sharp drop in new housing interest and a collapse in the first regional US manufacturing survey for August, the New York Fed’s Empire Manufacturing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their gains yesterday getting closer to the 200-day moving average sitting around the 4,322 level. The US 10-year yield seems well anchored below 3% and financial conditions indicate that S&P 500 futures could in theory trade around 4,350. The news flow is light but earnings from Walmart later today could impact US equities should the largest US retailer lower their outlook for the US consumer. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities were mixed. CSI300 was flat, with electric equipment, wind power, solar and auto names gained. Hang Seng Index declined 0.5%. Energy stocks fell on lower oil price. Technology names were weak overall, Hang Seng TECH Index (HSTECH.I) declined 0.9%. Sunny Optical (02382:xhkg) reported worse than expected 1H22 results, revenues -14.4% YoY, net profits -49.5%, citing weakening component demand from the smartphone industry globally. The company’s gross margin plunged to 20.8% from 24.9%. Li Auto’s (02015:xhkg/LI:xnas) Q2 results were in line with expectations but Q3 guidance disappointed. The launch L9 seems cannibalizing Li ONE sales. USD: strength despite weak US data and falling treasury yields and strong risk sentiment Yesterday, the JPY tried to make hay on China cutting rates and as global yields eased back lower, with crude oil marked several dollars lower on hopes for an Iran nuclear deal. But the move didn’t stick well in USDJPY, which shrugged off these developments as the USD firmed further across the board, despite treasury yields easing lower, weak data and still strong risk sentiment/easy financial conditions. A strong US dollar is in and of itself is a tightening of financial conditions, however, and yesterday’s action has cemented a bullish reversal in some pairs, especially EURUSD and GBPUSD, where the next important levels pointing to a test of the cycle lows are 1.0100 and 1.2000, respectively. Elsewhere, USDJPY remains in limbo (strong surge above 135.00 needed to suggest upside threat), USDCAD has posted a bullish reversal but needs 1.3000 for confirmation, and AUDUSD is teetering, but needs a close back below 0.7000 to suggest a resurgent US dollar and perhaps widening concerns that a Chinese recession will temper interest in the Aussie. Crude oil Crude oil (CLU2 & LCOV2) trades lower following Monday’s sharp drop that was driven by a combination softer economic data from China and the US, the world’s top consumers of oil, and after Iran signaled a nuclear deal could be reached soon, raising the prospect of more Iranian crude reaching the market. The latest developments potentially reducing demand while adding supply forced recently established longs to bail and short sellers are once again in control. Brent needs to hold support at $93 in order to avoid further weakness towards $90. Focus on Iran news. Copper Copper (COPPERUSSEP22) led the metals pack lower, without breaking any key technical levels to the downside, after China’s domestic activity weakened in July. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. HG copper jumped 19% during the past month and yesterday’s setback did not challenge any key support level with the first being around $3.50/lb. BHP, the world’s top miner meanwhile hit record profits while saying that China is likely to offer a “tail wind” to global growth (see below). EU power prices hit record high on continued surge in gas prices ... threatening a deeper plunge into recession. The latest surge being driven by low water levels on Europe’s rivers obstructing the normal passage for diesel, coal, and other fuel products, thereby forcing utilities to use more gas European Dutch TTF benchmark gas futures (TTFMU2) has opened 5% higher at €231/MWh, around 15 times higher than the long-term average, suggesting more pain ahead for European utility companies. Next-year electricity rates in Germany (DEBYF3) closed 3.7% higher to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That is almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. US Treasuries (IEF, TLT) see long-end yields surging. Yields dipped back lower on weak US economic data, including a very weak Empire Manufacturing Survey (more below) and another sharp plunge in the NAHB survey of US home builders, suggesting a rapid slowdown in the housing market. The survey has historically proven a leading indicator on prices as well. The 10-year benchmark dipped back further into the range after threatening to break up higher last week. The choppy range extends down to 2.50% before a drop in yields becomes a more notable development, but tomorrow’s US Retail Sales and FOMC minutes offer the next test of sentiment. What is going on? Weak Empire State manufacturing survey and NAHB Index Although a niche and volatile measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. China's CATL plans to build its second battery factory in Europe CATL unveiled plans to build a renewable energy-powered factory for car battery cells and modules in Hungary. It will invest EUR 7.34 billion (USD 7.5bn) on the 100-GWh facility, which will be its second one in Europe. To power the facility CATL will use electricity from renewable energy source, such as solar power. At present, CATL is in the process of commissioning its German battery production plant, which is expected to roll out its first cells and modules by the end of 2022. Disney (DIS) shares rise on activist investor interest Daniel Loeb of Third Point announced a significant new stake in Disney yesterday, helping to send the shares some 2.2% higher in yesterday’s session. The activist investor recommended that the company spin off its ESPN business to reduce debt and take full ownership of the Hulu streaming service, among other moves. Elliott exits SoftBank Group The US activist fund sold its stake in SoftBank earlier this year in a sign that large investors are scaling back on their investments in technology growth companies with long time to break-even. In a recent comment, SoftBank’s founder Masayoshi Son used more cautious words regarding the investment company’s future investments in growth companies. BHP reports its highest ever profit, bolstered by coal BHP posted a record profit of $21.3bn supported by considerable gains in coal, nickel and copper prices during the fiscal year ending 30 June 2022. Profits jumped 26% compared to last year’s result. The biggest driver was a 271% jump in the thermal coal price, and a 43% spike in the nickel price. The world’s biggest miner sees commodity demand improving in 2023, while it also sees China emerging as a source of stable commodity demand in the year ahead. BHP sees supply covering demand in the near-term for copper and nickel. According to the company iron ore will likely remain in surplus through 2023. In an interview Chief Executive Officer Mike Henry said: Long-term outlook for copper, nickel and potash is really strong because of “unstoppable global trends: decarbonization, electrification, population growth, increasing standards of living,” What are we watching next? Australia Q2 Wage Index tonight to determine future RBA rate hike size? The RBA Minutes out overnight showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, tonight sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35 bps move. RBNZ set to decelerate its guidance after another 50 basis point move tonight? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 44 bps for the October meeting after tonight’s 50 bps hike and another 36 bps for the November meeting. US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.   Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report 7% revenue growth y/y and 8% decline y/y in EPS as the US retailer is facing difficulties passing on rising input costs. Home Depot is expected to report 6% growth y/y in revenue and 10% growth y/y in EPS as the US housing market is still robust driving demand for home improvement products. Sea Ltd, the fast-growing e-commerce and gaming company, is expected to report revenue growth of 30% y/y in Q2 but worsening EBITDA margin at -16.2%. The previous winning company is facing headwinds in its gaming division and cash flow from operations have gone from positive $318mn in Q1 2021 to negative $724mn in Q1 2022. Today: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Germany Aug. ZEW Survey 0900 – Eurozone Jun. Trade Balance 1200 – Poland Jul. Core CPI 1215 – Canada Jul. Housing Starts 1230 – US Jul. Housing Starts and Building Permits 1230 – Canada Jul. CPI 2030 – API Weekly Report on US Oil Inventories 2350 – Japan Jul. Trade Balance 0130 – Australia Q2 Wage Index 0200 – New Zealand RBNZ Official Cash Rate announcement 0300 – New Zealand RBNZ Governor Orr Press Conference  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 16, 2022
Latam FX Outlook 2023: Brazil's Local Currency Bonds Can Be Very Attractive

Mexican Gold - Peso Is Climbing High. Russia Is Building Nuclear Plant In Turkey!?

Marc Chandler Marc Chandler 19.08.2022 14:26
Overview:  The dollar is on fire. It is rising against all the major currencies and cutting through key technical levels like a hot knife in butter. The Canadian dollar is the strongest of the majors this week, which often outperforms on the crosses in a strong US dollar environment. It is off 1.5% this week. The New Zealand dollar, where the RBNZ hiked rates this week by 50 bp, is off the most with a 3.5% drop. Emerging market currencies are mostly lower on the day and week as well. The JP Morgan Emerging Market Currency Index is off for the fifth consecutive session, and ahead of the Latam open, it is off 2.1% this week. Asia Pacific equities were mostly lower, and Europe’s is off around 0.4%. It was flat for the week coming into today. US futures are lower, and the S&P and NASDAQ look poised to snap its four-week advance. Gold, which began the week near $1800 is testing support near $1750 now. Next support is seen around $1744.50. October WTI is consolidating in the upper end of yesterday’s range, which briefly poked above $91. Initial support is pegged near $88. US natgas is softer for the third successive session, but near $9.04 is up about 3.2% for the week. Europe’s benchmark is up 1.7% and brings this week’s gain to almost 20%. Demand concerns weigh on iron ore. It was off marginally today, its fifth loss in six sessions. It tumbled 8.8% this week after a 1.15% gain last week. Copper is up fractionally after rising 1.3% yesterday. September wheat is trying to stabilize. It fell more than 4% yesterday, its fifth loss in a row. It is off around 8.5% this week. Asia Pacific Japan's July CPI continued to rise  Th headline now stands at 2.6%, up from 2.4% in June, up from 0.8% at the start of the year and -0.3% a year ago. The core measure that excludes fresh food accelerated from 2.2% to 2.4%. It is the fourth consecutive month above the 2% target. Excluding both fresh food and energy, Japan's inflation is less than half the headline rate at 1.2%. It was at -0.7% at the end of last year and did not turn positive until April. The BOJ's next meeting is September 22, and despite the uptick in inflation, Governor Kuroda is unlikely to be impressed. Without wage growth, he argues, inflation will prove transitory. With global bond yields rising again, the 10-year, the market may be gearing up to re-challenge the BOJ's 0.25% cap. The yield is finishing the week near 0.20%, its highest since late July. Separately, we note that after divesting foreign bonds in recent months, Japanese investors have returned to the buy side. They have bought foreign bonds for the past four weeks, according to Ministry of Finance data. Last week's JPY1.15 trillion purchases (~$8.5 bln) were the most since last September.  China surprised the markets to begin the week with a 10 bp reduction in the benchmark 1-year medium-term lending facility rate  It now stands at 2.75%. It was the first cut since January, which itself was the first reduction since April 2020. Before markets open Monday, China is expected to announce a 10 bp decline in the 1- and 5-year loan prime rates. That would bring them to 3.60% and 4.35%, respectively. These rates are seen closer to market rates, but the large banks that contribute the quotes are state-owned. There is some speculation that a larger cut in the 5-year rate. The one-year rate was cut in January, but the 5-year rate was cut by 15 bp in May. The dollar is rising against the yen for the fourth consecutive session  It has now surpassed the JPY137.00 area that marks the (61.8%) retracement of the decline from the 24-year high set-in mid-July near JPY139.40. There may be some resistance in the JPY137.00-25 area, but a retest on the previous high looks likely in the period ahead. The Australian dollar is off for the fifth consecutive session and this week's loss of 3% offset last week's gain of as similar magnitude and, if sustained, would be the largest weekly decline since September 2020. The Aussie began the week near $0.7125 and recorded a low today slightly below $0.6890. The $0.6855-70 area is seen as the next that may offer technical support. The PBOC set the dollar's reference rate at CNY6.8065 (median in Bloomberg's survey was CNY6.9856). The fix was the lowest for the yuan (strongest for the dollar) since September 2020. Yesterday's high was almost CNY6.7960 and today's low was a little above CNY6.8030. To put the price action in perspective, note that the dollar is approaching the (61.8%) retracement of the yuan's rise from mid-2020 (~CNY7.1780) to this year's low set in March (~CNY6.3065). The retracement is found around CNY6.8250. Europe UK retail sales surprised to the upside but are offering sterling little support  Retail sales including gasoline rose by 0.3% in July. It is the second gain of the year and the most since last October. Excluding auto fuel, retail sales rose by 0.4%, following a 0.2% gain in June. It is the first back-to-back gain since March and April 2021. Sales online surged 4.8% as discounts and promotions drew demand, and internet retailers accounted for 26.3% of all retail sales. Separately, consumer confidence, measured by GfK, slipped lower (-44 from -41), a new record low. Sterling is lower for the third consecutive session and six of the past seven sessions. The swaps market continues to price in a 50 bp rate hike next month and about a 1-in-5 chance of a 75 bp move. Nearly every press report discussing next month's Italian elections cited the fascist roots of the Brothers of Italy, which looks likely to lead the next government  Meloni, who heads up the Brothers of Italy and has outmaneuvered many of her rivals, and may be Italy's next prime minister, plays the roots down. She compares the Brothers of Italy to the Tory Party in the UK, the Likud in Israel, and the Republican Party in the US. The party has evolved, and the center-right alliance she leads no longer wants to leave the EU, it is pro-NATO, and condemns Russia's invasion of Ukraine. The center-right alliance may come close to having a sufficient majority in both chambers to make possible constitutional reform. High on that agenda appears to transform the presidency into a directly elected office. The Italian presidency has limited power under the current configuration, but it has been an important stabilizing factor in crisis. Ironically, the president, picked by parliament, stepped in during the European debt crisis and gave Monti the opportunity to form a technocrat government after Berlusconi was forced to resign in 2011. Fast-forward a decade, a government led by the Conte and the Five Star Movement collapsed and a different Italian president gave Draghi a chance to put together a government. It almost last a year-and-half. Its collapse set the stage for next month's election. The center-left is in disarray and its inability to forge a broad coalition greases the path for Meloni and Co. Italy's 10-year premium over German is at 2.25%, a new high for the month. Last month, it peaked near 2.40%. The two-year premium is wider for the sixth consecutive session. It is near 0.93%, more than twice what it was before the Draghi government collapsed. Some critics argue against the social sciences being science because of the difficulty in conducting experiments  Still an experiment is unfolding front of us. What happens when a central bank completely loses its independence and follows dubious economic logic?  With inflation at more than two decades highs and the currency near record lows, Turkey's central bank surprised everyone by cutting its benchmark rate 100 bp to 13% yesterday. Governor Kavcioglu hinted this was a one-off as it was preempting a possible slowdown in manufacturing. Even though President Erdogan promised in June rates would fall, some observers link the rate cut to the increase in reserves (~$15 bln) recently from Russia, who is building a nuclear plant in Turkey. The decline in oil prices may also help ease pressure on Turkey's inflation and trade deficit. The lira fell to new record-lows against the dollar. The lira is off about 7.5% this quarter and about 26.4% year-to-date. Significant technical damage has been inflicted on the euro and sterling  The euro was sold through the (61.8%) retracement objective of the runup since the mid-July two-decade low near $0.9950. That retracement area (~$1.0110) now offers resistance, and the single currency has not been above $1.01 today. We had suspected the upside correction was over, but the pace of the euro's retreat surprises. There is little from a technical perspective preventing a test on the previous lows. Yesterday, sterling took out the neckline of a potential double top we have been monitoring at $1.20. It is being sold in the European morning and has clipped the $1.1870 area. The low set-in mid-July was near $1.1760, and this is the next obvious target and roughly corresponds to the measuring objective of the double top.  America With no dissents at the Fed to last month's 75 bp hike, one might be forgiven for thinking that there are no more doves  Yet, as we argued even before Minneapolis Fed President Kashkari, once regarded as a leading dove, admitted that his dot in June was the most aggressive at 3.90% for year-end, hawk and dove are more meaningful within a context. Kashkari may be more an activist that either a hawk or dove. Daly, the San Francisco Fed President does not vote this year, suggested that a Fed funds target "a little" over 3% this year would be appropriate. She said she favored a 50 bp or a 75 bp move. The current target range is 2.25%-2.50%. and the median dot in June saw a 3.25%-3.50% year-end target. St. Louis Fed President Bullard says he favors another 75 bp hike next month. No surprise there. George, the Kansas, Fed President, dissented against the 75 bp hike in June seemingly because of the messaging around it, but it's tough to call her vote for a 50 bp hike dovish. She voted for the 75 bp move in July. She recognizes the need for additional hikes, and the issue is about the pace. George did not rule out a 75 bp hike while cautioning that policy operates on a lag. Barkin, the Richmond Fed President, also does not vote this year. He is the only scheduled Fed speaker today.  The odds of a 75 bp in September is virtually unchanged from the end of last week around a 50/50 proposition.  The October Fed funds implies a 2.945% average effective Fed funds rate. The actual effective rate has been rocksteady this month at 2.33%. So, the October contract is pricing in 61 bp, which is the 50 bp (done deal) and 11 of the next 25 bp or 44% chance of a 75 hike instead of a half-point move. Next week's Jackson Hole conference will give Fed officials, and especially Chair Powell an opportunity to push back against the premature easing of financial conditions  The better-than-expected Philadelphia Fed survey helps neutralize the dismal Empire State manufacturing survey. The median from Bloomberg's survey looked for improvement to -5 from -12.3. Instead, it was reported at 6.2. Orders jumped almost 20 points to -5.1 and the improvement in delivery times points to the continued normalization of supply chains. Disappointingly, however, the measure of six-month expectations remained negative for the third consecutive month. Still, the plans for hiring and capex improved and the news on prices were encouraging. Prices paid fell to their lowest since the end of 2020 (energy?) and prices received were the lowest since February 2021. The Fed also asked about the CPI outlook. The median sees it at 6% next year down from 6.5% in May. The projected rate over the next 10-years slipped to 3%. Canada and Mexico report June retail sales today  Lift by rising prices, Canada's retail sales have posted an average monthly gain this year of 1.5%. However, after a dramatic 2.2% increase in May, Canadian retail sales are expected (median in Bloomberg' survey) to rise by a modest 0.4%. Excluding autos, retail sales may have held up better. Economists look for a 0.9% increase after a 1.9% rise in May. Through the first five months of the year, Mexico's retail sales have risen by a little more than 0.5% a month. They have risen by a 5.2% year-over-year. Economists expected retail sales to have slowed to a crawl in June and see the year-over-year pace easing to 5.0%. The greenback rose the CAD1.2935 area that had capped it in the first half of the week. It settled near CAD1.2950 yesterday and is pushing closer to CAD 1.2980 now. Above here, immediate potential extends toward CAD1.3035. The US dollar is gaining for the third consecutive session against the Canadian dollar, the longest advancing streak in a couple of months. Support is seen in the CAD1.2940-50 area. The Mexican peso is on its backfoot, and is falling for the fourth session, which ended a six-day rally. The dollar has met out first target near MXN20.20 and is approaching the 20-day moving average (~MXN20.2375). Above there, the next technical target is MXN20.32. The broader dollar gains suggest it may rise above the 200-day moving average against the Brazilian real (~BRL5.2040) and the (38.2%) of the slide since the late July high (~BRL5.5140) that is found near BRL5.2185.    Disclaimer   Source: The Dollar is on Fire
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

USD/CAD Shows Promising Performance Of (USD) US Dollar, Which Could Be Additionally Boosted This Week!

Kenny Fisher Kenny Fisher 22.08.2022 13:31
The Canadian dollar is coming off a rough week, as USD/CAD climbed 1.70%. In today’s European session, USD/CAD is trading at the 1.30 line. Canadian retail sales beats estimate Canadian retail sales jumped 1.1% in June, which was much stronger than the 0.3% forecast. Still, this was lower than the May reading of 2.3%. Core retail sales dropped to 0.8%, just shy of the 0.9% estimate and below the May release of 1.9%. Consumers are feeling the pain from high inflation and rising interest rates and are cutting back on spending. The downtrend is expected to continue, with Stats Canada forecasting a -0.2% reading for headline retail sales in July. The Bank of Canada continues to play catch up with inflation and delivered a mega-hike of 100 basis points in July. Inflation slowed to 7.6% in July, down from 8.1% in June. However, the Bank’s preferred inflation indicator for core inflation rose to 5.5% in July, up from 5.3% in June. It’s too early to tell if inflation has peaked, but the steep rate-tightening cycle has slowed growth. The BoC has slashed its growth forecast for 2022 to 3.5%, down from a previous estimate of 4.2%, stating this was due to the impact of high inflation and tighter conditions on consumption and household spending. The BoC meets on September 7th and is expected to raise rates by 50 basis points. Federal Reserve Chair Powell will host a central banking conference in Jackson Hole this week. It will be another opportunity for the Fed to reiterate its message that inflation is far from being beaten and it has no plans to stop raising rates even if growth has slowed. The markets jumped on the drop in inflation in July, and speculation rose that the Fed might U-turn on its aggressive policy. I expect Powell to engage in some “push-back” and try to convince the market that the Fed is committed to taming inflation and will continue to raise rates to achieve this goal. USD/CAD Technical There is resistance at 1.3080 and 1.3167 USD/CAD has support at 1.2921 and 1.2834 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Cdn. dollar down despite solid retail sales - MarketPulseMarketPulse
bybit-news1

US Dollar (USD) Is Teetering On The Verge Of A Reversal Lower...

John Hardy John Hardy 30.08.2022 14:28
Summary:  The US dollar hasn’t been able to sustain a new rally after Fed Chair Powell’s speech on Friday, with further risk of weakness if incoming data doesn’t bring new upside pressure on US yields. A new thaw in risk sentiment has the USD also teetering on the verge of a reversal lower versus the G10 commodity dollars as well, with the technical outlook finely balanced in pairs like AUDUSD and USDCAD. Incoming data could bring a bump ride through the August CPI number on September 13. FX Trading focus: USD bulls on the defensive ahead of key data. EURUSD squeeze risk picks up above 1.0100 EURUSD has squeezed back higher this morning, and looks ready for a poke above 1.0100 if the minor US data points ahead of Friday’s US jobs report (today’s Consumer Confidence survey and JOLTS survey and Thursday’s August ISM Manufacturing survey) don’t offer any drama. But conviction is lacking as long as EURUSD remains within the seeming tractor-beam pull of parity and it is tough to develop conviction until we have had a look at the Friday’s US jobs report (big Average Hourly Earnings surprises may carry more weight than payrolls due to the inflation angle of earnings), the ISM Services survey on Tuesday (completely at odds with the alternative S&P Global non-manufacturing survey in July when the latter showed a slightly contraction while the July ISM Services was still a robust 56+. The flash August S&P Global reading worsened further to 44.0.), and most of all the August CPI release on September 13, given that the Fed has pre-declared that it is willing to tolerate economic weakness if inflation is not yet under control. ECB Chief Economist Lane was out yesterday arguing for a “steady” pace of “smaller” rate hikes rather than large moves – presumably a series of 50 basis point moves – to avoid “adverse effects” and as Lane believes that this would make it easier for ECB to course correct. This seemed to help cut short the EUR rally yesterday, but rate expectations for the ECB meeting next week are still around 50/50 for a 75-basis-point move, somewhat lower than they were at the peak yesterday after the hawkish speech from the ECB’s Schnabel at the Fed’s Jackson Hole conference at the weekend.  The German flash August CPI will be out around pixel time for this article. Chart: EURUSDThe US dollar backing off today and EURUSD pulls back above parity again after bobbing back and forth around that level yesterday and into this morning. The move likely only picks up likely order-driven momentum tactically on a move above 1.0100 and we face a further cavalcade of incoming data tests for the USD through the August US CPI figure as noted above, and for the EUR side of the equation, the test is next Thursday’s ECB meeting as well as whether Russia turns the gas back on next week after the purported maintenance of the Nord Stream 1 pipeline in coming days. A squeeze scenario could see 1.0200, with anything above that beginning to suggest at least an intermediate challenge of the down-trend. Short term long option strangles are one way to trade for zany choppiness in coming sessions (A long strangle approach is an idea for the indecisive trader, or the one that believes that we might see a squeeze on a move above 1.0100 but one that won’t hold – for example long 1.0125 calls and long 0.9975 puts w/ expiry next Wed. or Thursday, or a trader can simply choose one or the other leg if biased.) Source: Saxo Group Elsewhere, the tactical situation could not be more in limbo in pairs like AUDUSD and USDCAD, which teased a break in favour of a stronger US dollar, only to dive back into the range, if with insufficient force to suggest a tradable reversal. The trading conditions might remain treacherous there at least until the other side of the US jobs report. A CAD supportive crude rally, meanwhile, is fading fast today. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar is still top dog, but the Euro momentum has impressed in the wake of ECB guidance in recent days. Leading the race to the bottom is GBP. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURCHF is on the verge of flipping to positive for the first time in a very long time (last negative signal an impressive 53 days so far), EURGBP went positive so two sessions ago, and EURJPY did so yesterday. Still some work to get EURUSD there…. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 0130 – China Aug. Manufacturing/Non-manufacturing PMI   Source: FX Update: USD suddenly on defensive ahead of data.
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Bank Of Canada Is Expected To Hike By 75bp, What Could Possibly Help Canadian Dollar (CAD). Fed And BoC Have Been Hiking Parallelly For A Quite Long Time

ING Economics ING Economics 02.09.2022 12:28
While there are signs that activity may be slowing and inflation is peaking, there is a long way to go before inflation gets close to target. With excess demand still a clear concern for the Bank of Canada (BoC), we expect a 75bp hike. A hawkish BoC should ultimately help a CAD recovery, but that should take time to materialise The Bank of Canada hiked rates by 100bp in July with more expected by year-end Mixed data, but inflation backdrop suggests more tightening The Bank of Canada surprised markets with a 100bp rate hike at the July policy meeting as it sought to “front load the path to higher interest rates”. It suggested that "interest rates will need to rise further" with the central bank "resolute in its commitment to price stability". Since 13 July, the data has been a little mixed. Second-quarter GDP came in below expectations at 3.3%, but consumer spending rose 6.9% annualised with non-residential investment up 13.9%. It was a 30.5% surge in imports and a 27.6% drop in residential investment that held back growth. The residential story is obviously a worry while the fact employment has fallen for two consecutive quarters is also a slight concern. However, we see the loss of jobs as a temporary blip and the strength in domestic demand still points to an upward trend in employment activity. Moreover, the BoC will be concentrating on the strength in consumer demand and the fact inflation remains way above target at 7.6% with core inflation above 5%. Remember that the BoC suggested the economy is experiencing excess demand and has repeatedly warned that elevated inflation expectations heighten the risk that “inflation becomes entrenched in price and wage-setting. If that occurs, the economic cost of restoring price stability will be higher”. Given this situation, we expect the Bank of Canada to opt for a 75bp interest rate hike next Wednesday. This would leave the policy rate at 3.25%, which is above the “neutral rate”, assumed to be 2-3% by the Bank of Canada. We don’t think it will stop there given a desire to make positive restrictions to ensure inflation gets back to target. We expect a further 75bp of hikes by year-end. The Fed and BoC have historically moved in tandem Source: Refinitiv, ING FX: Good news for CAD, but more time is needed to recover The OIS market shows that a 75bp hike in September by the BoC is fully priced in, which suggests CAD should not directly benefit from the move on the day of the announcement. The market reaction will instead depend on forward-looking language by the BoC. Market pricing currently implies 50bp of extra tightening by year-end, which is below our expectations for 75bp. Furthermore, a Fed-style protest against any rate cut expectations for 2023 cannot be excluded and would have positive implications for CAD. In other words, there is decent potential for a repricing higher in BoC rate expectations. We do see a hawkish 75bp hike supporting CAD on the day of the announcement, but most of the benefits of the BoC tightening for the loonie may take time to emerge, and would likely rely on stabilisation in global risk sentiment and some easing in USD strength. This could start to happen towards the end of the year, and still, high energy prices do suggest that a move to 1.25 in early 2023 is a tangible possibility. Read this article on THINK TagsCanada Bank of Canada Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Continued Growth In Oil Prices May Put Pressure On The USD/CAD Pair

InstaForex Analysis InstaForex Analysis 06.09.2022 13:37
Market activity was noticeably lower than usual on Monday due to the holiday in the US. Local markets were closed and only electronic trading took place. Today, however, important economic data will be released, which fully reflect the negative situation in Europe. According to the data presented, business activity in the service sector of Germany, the Euro area and the UK showed a decrease, with Germany and the eurozone's level below 50 points. This indicates lack of growth in the sector, which is important for the Western post-industrial economy. Attention was also drawn to the retail sales report in the Euro area, which declined 0.9% y/y and 0.3% m/m in July. The data prior to this was revised upwards to -1.0%. In the wake of all these events, as well as the resumption of growth in oil prices in response to the unexpected decision of OPEC to slightly reduce the volume of production in order to keep prices near $100 per barrel, the European stock market lost all its positiveness and finished trading in different directions. The gloomy outlook for the European economy is back in the spotlight after the release of weak service PMI data. Additional negative was the decision to continue deliveries of natural gas to Europe only after the lifting of sanctions. This means that energy crisis can develop after the collapse of local industry, then proceed into a full-scale crisis with social consequences. In terms of the forex market, nothing significant happened yesterday because of low trading volatility. The ICE dollar index, having tested the 110-point mark, failed to gain a foothold above, and is currently below this level. It is likely that players are anticipating the outcome of the ECB meeting this week, as well as the speeches of Christine Lagarde and Jerome Powell. Today, the RBA raised its key interest rate by 0.50% to 2.35%, but did not cause any special movement in pairs with the Australian currency. Ahead are reports on business activity in the construction sector of Germany and the UK, as well as the index of purchasing managers for the non-manufacturing sector of the US. The dynamics can set the tone for trading not only in the US, but also on other world trading floors. But there is a chance that the current situation is just the calm before the storm, which may arise after the ECB meeting and release of GDP data from a number of economically developed countries. Forecasts for today: EUR/USD The pair is consolidating below 0.9975. A break of this level may lead to further growth towards 1.0050. USD/CAD The pair is trading below 1.3135. Continued growth in oil prices may put pressure on it, which will push the quote to 1.3065.       Relevance up to 09:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320908
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Canadian Dollar (CAD): Bank Of Canada Is About To Hike The Interest Rate! What's Expected?

FXStreet News FXStreet News 06.09.2022 15:52
BoC will announce its interest rate decision on Wednesday, September 7. Markets expect BoC to raise its policy rate by 75 bps. CAD needs a hawkish surprise to outperform USD. The Bank of Canada (BoC) is widely expected to hike its policy rate by 75 basis points (bps) to 3.25% from 2.50% following its September policy meeting. In July, the BoC surprised markets with a 100 bps rate hike and acknowledged in its policy statement that it had underestimated inflation since the spring of 2021 mainly because of global factors. Furthermore, the bank noted that its intention to front-load rate increases was due to broadening and persistent inflation. While commenting on the policy outlook in the ensuing press conference, "our aim is to get rates to the top-end or slightly above neutral range quickly,” BoC Governor Tiff Macklem said. According to the BoC’s policy statement, the neutral range is between 2% and 3%. In the meantime, Statistics Canada reported on August 16 that inflation in Canada, as measured by the Consumer Price Index (CPI), declined to 7.6% on a yearly basis in July from 8.1% in June. Hawkish scenario In case the BoC goes against the market expectation again and delivers another 100 bps rate hike, this could trigger a significant reaction and provide a boost to the Canadian dollar. In that scenario, the CAD should easily outperform the euro and the Japanese yen due to the policy divergence between the respective central banks. Against the USD, CAD’s gains could remain limited with investors awaiting the August inflation data from the US before deciding whether to price in a 75 bps Fed rate hike later in the month. It’s worth noting, however, that even if the BoC decides to raise its policy rate by 100 bps, it could refrain from committing to such aggressive rate hikes in the future. Since there will not be a press conference this time around, the language in the policy statement will be scrutinized by investors. Neutral scenario The BoC could opt for a 75 bps hike, as expected, and say in its policy statement that it will adopt a data-dependent approach moving forward while reiterating its commitment to bring inflation back to its 2% target. Such a rate increase would lift the policy rate “slightly above” the upper limit of its neutral range. A neutral tone could make it difficult for the loonie to stay resilient against its American counterpart. Dovish scenario If the bank raises the policy rate by 50 bps, the CAD is likely to face heavy selling pressure. The BoC could acknowledge the slowdown in economic activity alongside softening price pressures and tilt toward a more conservative policy stance. The latest data from Canada revealed that Real Gross Domestic Product (GDP) expanded at an annualized rate of 3.3% in the second quarter. This print followed the 3.1% growth recorded in the first quarter and missed the market expectation of 4.5%. Among the three different scenarios listed above, the dovish is the least likely one. Major central banks remain focused on bringing down inflation at the expense of growth and the BoC is unlikely to react to a single CPI print. Meanwhile, markets are pricing in a terminal rate of nearly 4%. Hence, a 50 bps rate hike would be a very big dovish surprise even if it’s enough to lift the policy rate to the upper limit of the neutral range.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Let's Have An Eye On Canadian Dollar (CAD) And Polish Zloty (PLN)! It's The Day Of Rate Hiking Across The Globe!

ING Economics ING Economics 07.09.2022 09:09
We expect the Bank of Canada to hike by 75bp and to maintain a hawkish tone for future tightening. In Poland, we see risks of a dovish surprise, as the NBP may only hike by 25bp and sound less hawkish after recent data. Elsewhere, good ISM data has reinforced Fed pricing and the dollar's momentum, while the risk of JPY intervention is rising significantly The Bank of Canada may raise rates by 75bp   We have recently published our monthly update of FX views and forecasts: “FX Talking: This is going to hurt” USD: Eyes on Fed speakers, and on the BoC's rate hike The dollar has remained bid since the start of the week, and was bolstered yesterday by a surprise rise (albeit marginal) in the US ISM service index. Our economist thinks yesterday’s figures endorse our 3%+ 3Q GDP forecast for the US. A solid growth story is indeed a key source of momentum for the dollar rally as markets feel increasingly confident with their pricing for more aggressive Fed tightening. A 75bp hike in September is almost fully priced in now (69bp are embedded into the swap market), but barring any big data disappointment, the room for any dovish re-pricing appears limited at this stage. The sharp underperformance of the Chinese yuan and Japanese yen has continued to fuel dollar strength too. This morning, a miss in Chinese trade data sent USD/CNY to test 9.9800, erasing efforts by the People's Bank of China to support the yuan. It remains to be seen how much Chinese authorities see 7.00 as a pivotal level: it’s possible that policymakers may want to keep USD/CNY below such a level, at least until the party congress is over. Further east, Japanese authorities are again trying verbal intervention as a way of supporting the yen, but markets appear quite happy with testing their tolerance. 145.00 might be the line in the sand: expect any FX intervention around the US or European open when markets are most liquid. Today, the Fed’s Beige Book will be scanned in search of regional economic trends, but the main focus will be on a few Fed speakers. Quite interestingly, we’ll hear from both sides of the spectrum: the quite dovish Lael Brainard and the hawk Loretta Mester. Both are voting members in 2022. Thomas Barkin is also due to speak today, while Chair Jerome Powell will deliver remarks tomorrow. For now, we see little reason to call for any reversion in the strong dollar pattern. The domestic story was fortified by yesterday’s data and there are no major data releases today, so ultimately the Fed pricing should not be too heavily affected even in the event of some dovish Fedspeak. DXY should remain around its highs. Elsewhere in North America, the Bank of Canada will announce monetary policy today. In our meeting preview, we highlight how the recent jitters to Canada’s growth story suggest another 100bp move is unlikely, but a 75bp rate hike (to 3.25%) is our base case considering that the employment picture remains rather strong and the BoC has remained firm in its intent to fight elevated inflation. 75bp appears to be the call from both economic consensus and the market, and we therefore think forward-looking language will drive most of CAD's reaction today. With “data-dependent, meeting-by-meeting” having become the leitmotiv of developed central bank policy communication lately, there’s surely a risk the BoC will refrain from offering any strong hint on future policy, but a reiteration that more substantial tightening is needed could be enough to see markets push their expectations for peak rates from the current 3.8% to 4%+. CAD is currently going through a rough period, and any support from the BoC today may fade rapidly. However, aggressive tightening by the central bank does raise the upside potential for the loonie beyond the short-term, when a stabilisation in sentiment and solid fundamentals may allow it to recover. We target a return to sub-1.25 levels in USD/CAD early next year. Francesco Pesole EUR: A bit of calm before the ECB? As of this morning, markets are pricing in 66bp of tightening by the European Central Bank at tomorrow’s announcement, but - as discussed in our economics team’s preview - our base case remains a 50bp hike. This obviously widens the scope for a further weakening of the euro later this week, but for today, some wait-and-see approach ahead of the big risk event could cap EUR/USD volatility, and the pair may enter tomorrow’s meeting from the 0.9900 level. A thread to keep an eye on this week aside from central bank activity is the ongoing discussion among EU members about solving the energy price problem. This may have particular relevance for the ECB as an EU-wide cap on energy bills would likely put a lid on inflation expectations, as well as offer a lifeline to the battered economic outlook. German Chancellor Olaf Scholz has continued to push for an agreement on price caps and stated yesterday that this could prove to be a relatively quick mechanism to implement. Francesco Pesole GBP: Expect more of the "Truss effect" The change of Prime Minister in the UK is most surely being felt by asset prices. Yesterday, gilts took a big blow, and the pound was the only G10 currency holding on to gains against a rising dollar as Liz Truss took office and reports about draft proposals piled up. So far, what we know is that Truss is planning a £130bn bill to freeze energy bills, to be paired with measures worth £40bn to support businesses. While Truss has also pledged to cut taxes in an effort to support the economy, it’s been reported that the new cost-of-living support packages would likely be funded by a bigger deficit instead of loans/grants to energy companies. All this matters for sterling not only because it has an impact on the growth outlook and Bank of England policy, but because it may have rather wide implications for the UK’s debt position. This is a factor that FX may start to be increasingly sensitive to especially in those instances (like the UK) where there is an increasingly negative current account balance. On the foreign policy side, it’s been reported that Truss is planning to ease the confrontation with the EU over post-Brexit agreements, and refrain from activating Article 16 of the Northern Ireland Protocol which allows the UK to unilaterally suspend parts of the agreement. This is undoubtedly a GBP positive, even though markets had not given a great deal of importance to the previous government’s standoff with the EU on Brexit. Today, expect more GBP volatility as details about Truss's plans continue to emerge. However, the net impact of support measures may not be too straightforward as they may easily get mixed in with the implications for BoE policy. EUR/GBP may edge back above 0.8600 today but seems to lack strong bearish momentum, while cable could re-test 1.1600. Francesco Pesole CEE: NBP slows hiking pace Today in the region we have the second estimate of GDP in Romania, which should show the details of the surprisingly strong economic growth in the second quarter. Also, we will see the release of industrial production in Hungary and Czech National Bank FX intervention data for July. We previously estimated that the CNB spent almost EUR11bn in July, almost half of all costs since mid-May. However, central bank activity since then has been almost zero by our estimates. Later today, we will see the highlight of the week in Central and Eastern Europe, the National Bank of Poland's decision. Our Warsaw team expects a 25bp rate hike to 6.75%, but a 50bp hike may also be on the table. The key though will be governor Adam Glapinski's press conference on Thursday which, given the latest economic data, should be dovish in any case. Markets are shifting rather to the hawkish side after the latest inflation number. So we think the market is expecting a clear response from the NBP to the surprisingly high inflation data and it will be very difficult for the central bank to meet hawkish expectations. Moreover, the NBP has surprised with a smaller step twice out of the last three meetings and in all three cases, it resulted in lower market rates. We think market conditions will lead to the same situation this time again. The Polish zloty is thus vulnerable both from the global environment due to the gas story this week and the domestic environment due to the dovish NBP. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

USD/CAD Is Surely Awaiting This One! Check Out The Expected Decision Of Bank Of Canada!

Kenny Fisher Kenny Fisher 07.09.2022 15:33
The Canadian dollar has edged higher today. In the European session, USD/CAD is trading at 1.3173, up 0.17%. BoC expected to remain aggressive The Bank of Canada meets later today and policy makers are expected to keep their foot on the pedal and deliver a sizeable hike of 0.75%. This follows the surprise super-size increase of 1.00% in July, which brought the benchmark rate to 2.50%. The BoC considers its neutral rate around 2.50%, which means that rates are headed to restriction territory in a bid to curb red-hot inflation. There was some good news as July CPI dropped to 7.6%, down from 8.1% in June, but this has not changed the BoC’s policy. In July, Governor Macklem responded to the drop in CPI by saying the Bank was committed to acting forcefully against inflation in order to avoid a sharper economic downturn. There had been some expectations that the BoC might implement another 1.00% increase at today’s meeting, but those expectations were dampened by last week’s disappointing GDP release for Q2. The economy grew by 3.3%, well short of the consensus of 4.4%, which means that the likely outcome of today’s meeting is a 0.75% hike. At the July meeting, Macklem said that the BoC was committed to front-loading rate increases now in order to avoid even higher rates down the road. Assuming Macklem’s stance hasn’t changed, this means that the BoC will shift into low gear in October, with a small rate hike of 0.25% or possibly no increase at all. If the next inflation report shows another drop, the BoC will be able to breathe easier and ease up on its rate-tightening cycle. USD/CAD Technical USD/CAD faces resistance at 1.3232, followed by 1.3338 There is support at 1.3102 and 1.2996 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steady ahead of BoC meeting - MarketPulseMarketPulse
Forex: Check The Performance Of EUR/USD, USD/JPY And USD/CAD!

Forex: Check The Performance Of EUR/USD, USD/JPY And USD/CAD!

Jing Ren Jing Ren 08.09.2022 08:42
EURUSD attempts to break out The euro recoups losses as traders expect a 50bp interest rate increase by the ECB. A bearish MA cross on the daily chart following a brief consolidation shows that the mood remains cautious at best. A failure to hold onto 0.9900 was a reminder of a strong bearish bias. However, a break above the first resistance at 0.9980 is an encouraging sign. The single currency will need a solid catalyst to propel it above the supply zone at 1.0090 and to make a recovery sustainable. Otherwise, the fresh support at 0.9870 could be at risk. USDJPY in limited pullback The Japanese yen recoups some losses as the Q2 GDP growth beats expectations. The dollar’s rally gained momentum after it lifted July’s high at 139.40. 145.00 is a hurdle and may see some profit-taking after the RSI soared into overbought territory. Past that, the pair could continue towards its 24-year high at 147.50. As sentiment remains extremely bullish, a pullback would be seen as an opportunity to stake in with 142.70 as the closest support. Further down, the psychological level of 140.00 would be the bulls’ stronghold. USDCAD hits resistance The Canadian dollar found support after the BoC raised interest rates by 75 bps as expected. The pair has been hovering under July’s high at 1.3220. A bullish MA cross on the daily chart and a series of higher lows indicate that the buying pressure has been building up. A breakout would remove the lid and attract momentum buyers. Then 1.3400 near its two-year high would be the next target. The price action is testing 1.3060, a key demand zone from the latest accumulation. Its breach could force the bulls to bail out.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

How Will The Decisions Of The ECB And The Fed Affect The Main Currency Pairs?

InstaForex Analysis InstaForex Analysis 08.09.2022 12:49
Global equity markets rebounded after dollar and US Treasury yields pared losses on Wednesday. It seems that risk appetite recovered on the eve of the ECB meeting on monetary policy as many expect the central bank to raise the key interest rate by 0.75%. Investors also paid attention to published economic statistics, such as the Q2 GDP of the Euro area, which grew by 0.8% instead of 0.6%. Its previous data was also revised upwards to 0.5%. In annual terms, the indicator added up to 4.1%, but is significantly lower than the previous figure of 5.4%. Other data showed that industrial production in Germany returned to negative in July, as evidenced by industrial output figures. These data, as well as the decision of the ECB to consider emergency measures to curb electricity price surges, pushed the local stock market and euro up. However, dollar's fall was not really caused by them as it is more likely prompted by the warning made by Fed member Lael Brainard about the risk of too-high interest rates. If the Fed withstands pressure and continues to follow the current cycle of raising rates, a new wave of sell-offs will be seen stock markets, while demand for dollar will grow. Talking about the upcoming ECB meeting, it is likely that the central bank will increase rates by 0.75% to curb inflation. This will push EUR/USD up to 1.1000 and support other currencies including the British pound. But if Jerome Powell talks about continued aggressive actions by the Federal Reserve, the US stock market will collapse, while Treasury yields and dollar will grow. This will limit the rally of euro, preventing it to break through 1.1000. Forecasts for today: EUR/USD The pair is consolidating below 1.0010. It could rise to 1.0080 if the ECB raises the rate by 0.75% and makes it clear that they will continue to act aggressively in the future. USD/CAD The pair is consolidating above 1.3100. Continued growth in crude oil prices, as well as a tough policy of the Bank of Canada, may lead to a fall to 1.3015.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321136
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

USD/CAD Has Posted Steady Gains In The Asian And European Sessions

Kenny Fisher Kenny Fisher 09.09.2022 15:42
The Canadian dollar usually is calm prior to the North American session, but USD/CAD has posted steady gains in the Asian and European sessions. USD/CAD is trading at 1.2993, down 0.73% on the day. Canada’s job market expected to rebound Canada releases the August employment report later today, with a market consensus of 15.0 thousand. The economy has shed jobs over the past two months, as the labour market appears to be losing momentum. This could affect future rate policy, as a weaker labour market may force the BoC to ease up on rate hikes earlier than it would like. The BoC delivered a 0.75% hike this week, following the super-size 1.00% increase in July. This brings the benchmark rate to 3.25%, the highest rate among the major central banks. Governor Macklem has said that the BoC is committed to front-loading rate increases now in order to avoid even higher rates down the road, which means that the Bank can relax in October, with a 0.25% hike or possibly no move at all. Inflation in July surprised by dropping to 7.6%, down from 8.1% in June. It’s too early to determine if inflation has peaked based on one release, but another decline would signal that tighter policy is bringing down inflation, which would allow the Bank to ease up on rate hikes. The BoC considers its neutral rate around 2.50%, and with the benchmark rate currently at 3.25%, the Bank’s policy is currently restrictive. This should dampen growth as well as inflation. Canada’s economy grew by 3.3% in Q2, below the estimate of 4.4%, but still a positive signal that the BoC could succeed in its delicate task of guiding the slowing economy to a soft landing. . USD/CAD Technical There is resistance at 1.3102 and 1.3232 USD/CAD is testing support at 1.2996, followed by support at 1.2866 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
5% for the US 10-Year Treasury Yield: A Realistic Scenario

Eyes On US Inflation Data And Gold & Silver Benefit From Softer USD

Swissquote Bank Swissquote Bank 13.09.2022 14:16
Global indices made a solid start to the week. The EuroStoxx 600 closed yesterday 1.76% higher on news that the Ukrainians are doing well pushing back the Russians in territories they launched a counteroffensive attack. The S&P500 and Nasdaq advanced more than 1%, despite chatter of rail strike in the US. Hope of softer US inflation is what keeps the bulls running. US inflation data US inflation data is due today, and the CPI is seen easing toward 8.1% in August versus 8.5% printed a month earlier, and 9.1% peak printed the month before. A second month of soft inflation read has the power to soften the Fed hawks and increase the bets of softer rate hikes beyond September, whereas a figure above expectations, or worse, a figure above last month’s read could snap the latest rally and send the stocks tumbling. We are tilted toward a softer read than not. Hope of a soft inflation data is also what’s pulling the US dollar lower across the board. The dollar index tipped a toe below the 108 mark yesterday, while the EURUSD made an attempt above its 50-DMA, as news that Ukrainian troops are being successful in their counteroffensive attack, and chatter that voices are rising in Russia against the regime’s strategy in Ukraine, brought forward the possibility of Russia being defeated in Ukraine. Cable flirts with the 1.17 level, the dollar-swissy retreated to 0.95 and the USDCAD slipped below 1.30. The American crude, gold and silver are better The American crude rallied more than 2% yesterday on improved market sentiment, and flirted with the $90 offers, without however being able to clear them. Gold and silver are also better bid into the inflation data, thanks to a broadly softer US dollar. Watch the full episode to find out more! 0:00 Intro 0:25 Equities extend gains 0:58 … despite discouraging news for US retailers 2:25 US inflation is all that matters 6:20 USD soft pre-CPI, EUR gains on Ukraine news 7:15 Pound firmer but… 8:40 Crude oil flirts with $90 9:00 Gold & Silver benefit from softer USD Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #EUR #CAD #CHF #GBP #Gold #XAU #Silver #XAG #crude #oil #EuroStoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH        
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

USD/CAD: Crude Oil Supports Canadian Dollar, USD Is Ahead Of Even 100bp Rate Hike

TeleTrade Comments TeleTrade Comments 14.09.2022 12:21
USD/CAD retreats from one-week high amid weaker USD, downside seems cushioned USD/CAD surrenders modest intraday gains to the 1.3200 neighbourhood, or a one-week high. A positive risk tone weighs on the safe-haven greenback and exerts some downward pressure. Aggressive Fed rate hike bets and recession fears warrant caution for aggressive bearish traders. The USD/CAD pair struggles to capitalize on its intraday positive move to a one-week high set earlier this Wednesday and retreats to the 1.3160-1.3165 area during the first half of the European session. The pullback is sponsored by a modest US dollar weakness, though the fundamental backdrop supports prospects for the emergence of some dip-buying. Crude Oil Price And CAD A recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - seems to weigh on the safe-haven greenback. Apart from this, an intraday bounce in crude oil prices underpins the commodity-linked loonie and exerts some downward pressure on the USD/CAD pair. That said, growing acceptance that the Fed will stick to its aggressive policy tightening path to tame inflation should continue to act as a tailwind for the buck. Investors started pricing in the possibility of a full 1% rate hike at the next FOMC policy meeting on September 20-21 following the release of stronger US consumer inflation data on Tuesday. This is reinforced by a fresh leg up in the US Treasury bond yields. In fact, the yield on rate-sensitive two-year US government bonds climbs to an almost 15-year high and the benchmark 10-year US Treasury note holds steady just below the YTD peak touched in June. Global Recession The prospects for faster rate hikes by the US central bank, along with economic headwinds stemming from fresh COVID-19 curbs in China, have raised concerns about a global recession. Concerns that a deeper economic downturn will dent fuel demand should keep a lid on oil prices, which, in turn, should weigh on the Canadian dollar and offer support to the USD/CAD pair. Hence, it will be prudent to wait for strong follow-through buying before confirming that the previous day's solid recovery of over 200 pips from the vicinity of mid-1.2900s has run out of steam. Market participants now look forward to the US Producer Price Index (PPI), which, along with the US bond yields and the broader risk sentiment, will influence the USD. Apart from this, traders will also take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair. Nevertheless, the bias still seems tilted firmly in favour of bullish traders and any intraday downfall is more likely to remain limited. Bulls, however, might wait for sustained strength beyond the 1.3200 mark before positioning for further gains. Technical levels to watch
Analysis Of The AUD/JPY Currency Pair Scenarios

Report Results And Their Impact On The Market And Decisions Of The Fed And Bank Of Japan

Saxo Bank Saxo Bank 14.09.2022 13:28
Summary:  The core US August inflation data shocked the market as prices reportedly rose at twice the expected rate in August at the core. This triggered a massive spike back higher in the US dollar, with the market caught on the wrong foot and suddenly forced to entertain the risk of a 100 basis point rate hike from the Fed at next week’s FOMC meeting. Overnight, the Bank of Japan and Japanese Ministry of Finance upped the ante on intervention risks, tempering the rise in USDJPY. FX Trading focus: Core CPI shocker from the US resets the USD. Beware the BoJ. The headline US CPI data came in slightly above expectations, with a year-on-year reading of 8.3% vs. 8.1% expected and a month-on-month reading of +0.1% vs. -0.1% expected, the latter a solid surprise given sharp drops of late in gasoline prices. But the real shock was the core Ex Food and Energy inflation reading of +0.6% month-on-month, twice what was expected. This triggered an enormous slide in risk sentiment as the market rushed to price the risk that the FOMC might hike as much as 100 basis points next week. As of this morning, nearly 85 basis points of tightening are priced in the market for next meeting. The Fed doesn’t like to surprise the market, so if that builds a bit higher rather than receding back closer to 75 basis points on its own accord by early next week, the Fed will need to send out the WSJ’s Timiraos to pen an article guiding for 75 basis points if it wants to avoid shocking the market. There are a number of good reasons that the market was looking for a softer print yesterday, and this one data point is not enough to suggest that inflation will continue at the run-rate suggested by the August CPI data point, but as is readily evident, it had changed the odds on the size of next week’s hike, the guidance in the wake of that hike in terms of the monetary policy statement and the Fed’s own macro-economic projections. To get follow-on USD strength here, the next data points of note are tomorrow’s US August Retail Sales and weekly US initial jobless claims. I lean for the risk of a stronger than expected Retail Sales data point due to the psychological boost of gasoline prices having dropped so precipitously from their June highs and as millions of US consumers saw their student debt loads drastically reduced by the Inflation Reduction Act that was passed mid-month. As for the weekly claims, these seem to be in a new declining trend after rising into the early summer period from record lows (adjusted for population) earlier in the year. The Bank of Japan and Japanese Ministry of Finance, as I discuss below, may make life difficult for FX traders. Chart: AUDUSDInteresting to note that the USD reaction was most violent against some of the traditional risk-correlated currencies like AUD and NZD, with AUDUSD suddenly poking down close to cycle lows this morning, or at least below the lowest daily close of the cycle at one point this morning. To get new lows, we’d likely need to see the weak risk sentiment persisting her and a test of the June market lows, together perhaps with the Fed delivering a 100 basis point hike next week and US 10-year yields moving above the 3.50% cycle high from June (this morning trading at3.43%.) The recent price action cemented the 0.6900+ area pivot high as the key tactical resistance of note. Australia reports employment data tonight. The Bank of Japan carried out a “rate check” in the FX market, which is widely seen as a precursor for actual market intervention. This tamed the USDJPY move higher from sub-142.00 levels to nearly 145, as the gains were pared back below even 143.00 this morning, with the JPY also firmer broadly. Finance Minister Suzuki said nothing could be ruled out in response to the weakening JPY and that if the current trend persisted, stepping into markets is an option. But as past experience has shown, intervention often only creates temporary volatility if the underlying issue is not addressed - in this case, the Bank of Japan's insistence on maintaining very low rates and capping yields out to 10 years. If yields continue to rise globally, Japanese officialdom will have an enormous and likely unwinnable fight on its hands if the Bank of Japan fails to change its policy. In the meantime, history shows that determined intervention can make for very choppy markets, even for other USD pairs as USDJPY volatility spikes back and forth. Table: FX Board of G10 and CNH trend evolution and strength.The USD has leaped back higher – watching for the degree to which the price holds and follows through if the 100 basis point FOMC move scenario next week solidifies amidst a supporting cast of data. Note the marked NOK weakening, a theme discussed yesterday. And note the CHF Strength – an interesting test for the EURCHF pair next week over the SNB meeting, given EU plans to cap energy prices as the pair trades near multi-year lows. Will there be a bit more caution from the SNB than before? Table: FX Board Trend Scoreboard for individual pairs.We noted many pivotal USD pairs yesterday: well the USD provided a pivot and then some yesterday – now about seeing whether the action remains choppy a la USDJPY or reasonably smooth new USD trend can develop. Note USDNOK trading up against a big resistance line, NZDUSD toying with 0.6000 this morning and AUDUSD not far from the cycle lows, while USDCAD has poked near the cycle top. Also, very interesting signs of possible exhaustion of weak GBP sentiment as the currency is rolling higher against a growing cast of the smaller G10 currencies (GBPNOK, GBPNZD, GBPAUD on the cusp, etc.) Upcoming Economic Calendar Highlights 1230 - US Aug. PPI  1230 - Canada Jul. Manufacturing Sales 1430 - ECB's Villeroy to speak 2245 - New Zealand Q2 GDP 2350 - Japan Aug. Trade Balance 0120 - China Rate Announcement 0130 - Australia Aug. Employment Data Source: https://www.home.saxo/content/articles/forex/fx-update-us-august-cpi-triggers-a-landslide-beware-the-boj-14092022  
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Less Volatility In The Forex Market, The Huge Problems In The Global Economy

InstaForex Analysis InstaForex Analysis 16.09.2022 12:34
Consumer inflation in the US seems to have completely deprived the market of hopes that the Fed, after an aggressive rate hike next week, will continue to raise them less vigorously. This is because the weaker-than-expected decline in inflation on a yearly basis and its rise on a monthly basis have brought to life a new wave of forecasts. FedEx CEO Raj Subramaniam also said that the drop in traffic volumes around the world is a clear indication of the huge problems in the global economy. This led to a decline in the US stock market yesterday. Tesla CEO Elon Musk said the same thing, remarking that an aggressive increase in interest rates would cause irreparable damage to the US economy. But the US Central Bank is too determined to reduce inflation, believing that this is an important task and as long as the state of the economy allows tough measures to be implemented, they must be applied. Next week's meeting will show whether the Fed will give up or not. So far, the forex market, in contrast to the stock market, demonstrates noticeably less volatility. Traders are obviously waiting for the outcome of the Fed meeting, so there will be no noticeable changes until it ends. In this regard, the price movement of EUR/USD will stall for a while. But the Fed's continued tight stance on monetary policy will be a major downside, and even the expected increase in the ECB interest rate will not help euro. Most likely, it will drop to a local low of 0.8225 or under. Much will depend on the economic situation in Europe and the United States. If the Fed starts to soften its stance, the pair may hit 1.0200 or higher. Forecasts for today: USDCAD The pair is trading above 1.3250. Further buying pressure will raise the quote to 1.3370. GBP/USD The pair is trading at a local low of 1.1400. A decline below 1.1410 could serve as an impetus for its further fall towards 1.1310.   Relevance up to 08:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321889
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Mixed Macroeconomic Data And Behavior Of Currency Pairs

Saxo Bank Saxo Bank 16.09.2022 14:18
Summary:  The US dollar continues to drive higher together with the pricing for the Fed’s terminal policy rate reaching new highs near 4.50%. The JPY managed to hold the line and then some against a surging greenback as the market seems unwilling to challenge the Bank of Japan for now despite the higher US yields. Elsewhere, the descent in sterling is verging on scary, with GBPUSD staking out new record lows since 1985 below 1.1400 as EURGBP broke the range highs. FX Trading focus: Sterling descent getting scary after weak UK Retail Sales. USDJPY stays tame even with stronger USD and higher US treasury yields. The USD arched to new highs this morning versus a majority of G10 currencies, with USDJPY the notable pair not participating in the move as the market seems unwilling to challenge the Bank of Japan for now. One of the proximate triggers for a shift lower in risk sentiment late yesterday was the weak result and guidance from FedEx after US trading hours. As well, US short treasury yields continue to rise and provide plenty of pressure on markets. As for USDJPY, arguably longer yields are a more important coincident indicator, and US long yields have not yet broken to new cycle highs (3.50% for the US 10-year Treasury benchmark) although they are pushing hard on that level. The short end of the US yield curve, continues to rise apace even as the predictions for next week’s meeting pulled back slightly, meaning that the “terminal rate” for the cycle is getting priced higher – and has nearly hit 4.50%, more than a hundred basis points above where it was in early August. Data from the US yesterday was mixed. The headline US August Retail Sales report was slightly stronger than expected at +0.3% MoM vs. -0.1% expected, but July was revised down to -0.4% from 0.0%. The core Retail Sales data was slightly weaker than expected at +0.3% ex Autos and Gas, likewise with a negative revision (down to +0.3% for July after +0.7% was reported). Important to note that the US reports Retail Sales in nominal dollar changes, so this report suggests stagnating volumes. The latest weekly jobless claims data point yesterday was the lowest since late May, extending the recent falling trend. The UK August Retail Sales data this morning, on the other hand, was distinctly weak and set off an extension lower in sterling, as EURGBP broke above 0.8722 for the first time since early 2021 UK reports Retail Sales in volumes, not in nominal prices, and the month-on-month data developments were extremely weak, pointing to a steep real growth slowdown. Sales including petrol fell -1.6% MoM in August and -1.5% ex petrol. The August Ex Petrol volumes dip takes the data below the 2019 level in August, the first time that has happened in this calendar year. Waiting for the close of trade today for next steps as we have quarterly “witching” of massive derivatives exposures in the US today and with it, possibly erratic trading. Very interesting to see the combination of USDJPY unwillingness to move today together with USDCNH on the rise (so CNHJPY dropping), while EURUSD is also a bit stuck and backing up after trying lower in the European morning today. Some USD exhaustion creeping in at least within the G3? And if risk sentiment continues to deteriorate, will it remain always a function of the rising Fed expectations, or can it jump horses to concerns for the economic cycle? In other words, the eventual chief question may be: what happens to the USD if bond and stocks diverge in direction? Chart: GBPUSDGBPUSD declines took on extra energy this morning in the wake of the weak August UK Retail Sales data that showed a sharp contraction in volumes in August, a sign of real GDP contraction. This took EURGBP to new highs since early 2021 (pointing that out as an indication of isolate GBPS weakness), while GBPUSD drove down to record lows since the mid-1980’s. Not sure what can bring relief for sterling here save for a halt to the relentless rise in US yields and/or thawing risk sentiment after the steep plunge this week. As for next level, only round, psychological ones seem relevant as the 1985 lows near 1.0500 are impossible to compare in real effective terms after 37 years. Bulls will have to hope that sentiment shifts here and for a quick rejection of the new lows to confirm a divergent momentum scenario (stochastic indicator turning back higher after new price lows posted with indicator not at new lows). EURCHF hit new cycle lows yesterday below 0.9550, but these were rapidly rejected. Without any catalyst I could identify, this looks like possible intervention – perhaps as energy prices have calmed, meaning that the SNB wants to lean a bit the other way now? Very curious to hear the SNB next Thursday. Table: FX Board of G10 and CNH trend evolution and strength.The stronger euro beginning to stick out, as does the JPY resilience, as the smaller currencies and sterling have traded weakest. Gold hit the skids on breaking below the big range level around 1,680. CNH is on the weak side, which is interesting, given the strong US dollar, but let’s watch 7.20 in USDCNH to see if there is any real fireworks potential. Table: FX Board Trend Scoreboard for individual pairs.JPY has strengthened enough to have a go at flipping stronger versus NOP and NZD today. More interested in whether the CNHJPY rate flips negative next week. Upcoming Economic Calendar Highlights 1200 – Poland Aug. Core CPI 1215 – Canada Aug. Housing Starts 1400 – US Sep. Preliminary University of Michigan Sentiment Source: https://www.home.saxo/content/articles/forex/fx-update-sterling-descent-takes-gbpusd-to-historic-low-16092022
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Canadian Dollar (CAD): Bank Of Canada Decides On Interest Rate Soon And It's Not That Obvious What They're Going To Do

Jing Ren Jing Ren 19.09.2022 11:16
The BOC has taken an even more aggressive rate hike route than the Fed, giving the CAD the fastest rising rate of the majors. This didn't stop the meteoric rise in inflation that most developed countries have been seeing this year, although not as dramatic as in the US. Given the economic interconnectivity with the US, it's not surprising that CPI trends have been similar in both countries. Read next: How High Will The Bank Of England Raise Rates?| FXMAG.COM However, unlike in the US, Canada has been seeing not only a flattening but actual downturn in core CPI, the measure followed by central banks. This opens the question whether the BOC's increased frontloading of the interest rate means they can slow the pace of hikes before other central banks. Particularly as more economists worry that there is a recession on the horizon, if it's not already here. If core rates continue to fall, there would be further arguments for the BOC to not "lead" the Fed higher. The BOC meets again in late October. What to look out for Canada's inflation rate is expected to fall for the second consecutive month to 7.3% from 7.6% prior. This is expected to be supported by a -0.1% monthly rate, compared to 0.1% in July. The figures mirror the results seen in the US, but at a lower level. The drop in global crude prices has contributed to a reduction in energy costs in Canada as well. But what the BOC focuses on is the core rate, which trims off the effects of energy and food prices. And there the situation is a little more complicated, since annual core CPI is expected to rise to 6.2% from 6.1% prior. This is based on an expected acceleration in the monthly measure to 0.6% from 0.5% in July. Putting the pieces together Just like with the US' data from last week, even if the headline inflation rate goes down, the market is likely to react to the core rate. However, the differences that could impact the market here are really small. If the core rate is in line with expectations, it's just a decimal away from the prior. And a variation of a couple of decimal points from expectations is quite common. If the rate were to be at 6.1% or above, it would likely lead to speculation that the BOC will keep its aggressive stance. Because it suggests that a downward trend in the core inflation rate has not been established yet. This idea could get an extra boost later this week if the Fed raises rates by 100bps, which could lead to speculation that the BOC might raise rates by a full percentage point again. What if expectations aren't met? On the other hand, a miss of expectations by just two decimals (or more) would signal that the downward trajectory in inflation is intact. That could return the discussion to how much the BOC will moderate its tightening at the next meeting. And, again, this could be further supported if the Fed hikes by just 75bps on Wednesday. Read next: This Will Be The Highest Rate Level In Five Years| FXMAG.COM As for the Canadian dollar, weakness has been attributed to the expectation that the BOC will "pivot" first. But if headline inflation is coming down, while core inflation signals the BOC will remain aggressive, the upward trend of the USDCAD could get interrupted. Of course, the situation could be reversed if inflation signals the BOC could take a breather in the steep rate climbing.
Shell's H1 2023 Performance and CEO's Bold Stance on Renewable Energy

Is the USD/CAD Pair Moving Towards The Top Boundary ?

TeleTrade Comments TeleTrade Comments 20.09.2022 13:35
Canada CPI Overview Statistics Canada will release the latest consumer inflation figures for August later during the early North American session on Wednesday, at 12:30 GMT. The headline CPI is expected to decline by 0.1% MoM as compared to a modest 0.1% rise reported in July. Furthermore, the yearly rate is anticipated to decelerate from 7.6% to 7.3% in August. More importantly, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, is estimated to rise by 0.3% MoM in August and come in at 6% on a yearly basis, down from 6.1% in July. Analysts at RBC Economics offer a brief preview of the report and explain: “We look for a dip from 7.6% in July to 7.2% in August – down from a recent peak of 8.1% in June. But beneath the weakening headline number, some prices are still powering up. Food price growth likely accelerated again. And we look for the rate excluding food and energy products to hold steady at 5.5%. Alongside this, the Bank of Canada’s preferred core inflation measures also likely remained elevated. We continue to believe the headline inflation rate has hit its peak as lower commodity prices and easing global supply chain pressures lower growth in goods prices. But we don’t expect ‘core’ measures to peak until later this year when higher interest rates start to cut deeply into consumer demand.” How Could it Affect USD/CAD? The Bank of Canada (BoC)focuses more on the core rate. If the reading comes in line with expectations or slightly above, it will fuel speculations the BoC will keep its aggressive stance. This might be enough to provide a modest lift to the Canadian dollar, though subdued action around crude oil prices could cap any meaningful upside. Conversely, a softer print should allow the USD/CAD pair to build on its intraday positive move amid resurgent US dollar demand. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the USD/CAD pair is to the upside. Hence, a subsequent strength back towards testing the highest level since November 2020, around the 1.3345 region touched on Monday, remains a distinct possibility. The momentum could further get extended towards the top boundary of a multi-month-old ascending channel, currently placed just ahead of the 1.3400 round-figure mark. On the flip side, the 1.3220-1.3210 region, coinciding with the overnight swing low, might continue to protect any meaningful pullback ahead of the 1.3200 mark. Any subsequent decline might still be seen as a buying opportunity and find decent support near the 1.3120-1.3115 region. This is closely followed by the 1.3100 mark, below which the USD/CAD pair could accelerate the fall towards the next relevant support near the 1.3055 horizontal zone. Key Notes   •   Canadian CPI Preview: Forecasts from five major banks, core inflation to stay high   •   USD/CAD Forecast: Bullish potential intact, Canadian CPI eyed ahead of FOMC meeting   •   USD/CAD: Levels below 1.30 might remain out of reach for now – Commerzbank About Canadian CPI The Consumer Price Index (CPI) released by Statistics Canada is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of CAD is dragged down by inflation. The Bank of Canada aims at an inflation range (1%-3%). Generally speaking, a high reading is seen as anticipatory of a rate hike and is positive (or bullish) for the CAD.
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

The USD/CAD Pair Has The Strong Upward Momentum And Possibility For Further Growth

InstaForex Analysis InstaForex Analysis 20.09.2022 14:10
Canada's second-quarter GDP grew by +3.3% year-on-year, data released earlier this month by Statistics Canada showed. This indicator followed the growth of 3.1% in the first quarter but also fell short of the market's growth expectations of 4.5%. On a quarterly basis, real GDP grew by 0.8%. "Growth in the 2nd quarter was contained by a decline in investment in housing construction and household spending on durable goods, as well as growth in imports, which exceeded exports. Final domestic demand rose by 0.7% after a 0.9% increase in the first quarter," Statistics Canada said. At the same time, business activity in the manufacturing sector of Canada declined in August, and the S&P Global PMI fell to 48.7 from 52.5 in July. The reading was well below market expectations of 53.6 and fell below 50, which separates growth from slowdown in business activity. At the same time, "output and new orders fell at a faster pace, and employment fell for the first time since the start of the pandemic in two years," S&P Global Market Intelligence noted. Nevertheless, at a meeting on September 7, the Bank of Canada decided to tighten financial conditions for the country's business by raising the interest rate once again and immediately by 0.75%. In an accompanying statement, the BOC said that rates would need to be raised further given the outlook for inflation. "The data point to a further increase in price pressures, especially in services. Short-term inflation expectations remain high and the Bank of Canada remains strongly committed to price stability and will take the necessary steps to reach its 2% inflation target." Data released two days later showed that the Canadian unemployment rate rose to 5.4% in August from 4.9% in July, which was worse than market expectations of 5%. The net change in employment was -39.7k versus the market's expectation of +15k. Full-time employment decreased by 77.2k and part-time employment increased by 37.5k over the same period. Thus, the BOC found itself in a difficult situation. On the one hand, it needs to control the level of inflation, which continues to rise. On the other hand, it also needs to take into account the deteriorating macroeconomic data coming from Canada. The next meeting of the regulator is on October 26. Assessing the reaction of the Canadian dollar to the results of the September meeting of the BOC (it first strengthened and then continued to sharply weaken against the US dollar), it would probably be logical to assume further growth in the USD/CAD pair, also taking into account the fall in oil prices, stock indices and expectations of the development of a super tight monetary policy cycle of the Fed. Today, the Fed meeting begins, which will end on Wednesday with the publication of the decision on the interest rate. Another increase of 0.75% is widely expected. However, a significant number of economists and market participants are betting on a more decisive tightening of the Fed's monetary policy (an increase in the interest rate by 1.0% at once) and on harsh comments from the Fed's leaders regarding the further prospects for the central bank's policy. As for today's news concerning the dynamics of the CAD and the USD/CAD pair, it is worth paying attention to the publication at (12:30 GMT) of consumer price indices in Canada. They are a key indicator of inflation, and consumer prices account for the majority of overall inflation. Estimating the level of inflation is important for the management of the central bank in determining the parameters of the current monetary policy. If the expected data turns out to be weaker than the previous values, as expected, this will negatively affect the CAD and positively affect the USD/CAD pair. As of writing, it is trading near 1.3285, in a sustained bull market. On the daily chart of the pair, there is a recently formed range between the local high at 1.3343 and the low at 1.3227. Given the strong upward momentum, it is logical to assume further growth, and a breakdown of the local resistance level 1.3343 will be a confirming signal for our assumption.   Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322148
The Situation In Ukraine And The Fed's Decision Strongly Affect The Currency Pairs

The Situation In Ukraine And The Fed's Decision Strongly Affect The Currency Pairs

InstaForex Analysis InstaForex Analysis 21.09.2022 13:14
Tension in markets has increased markedly. Investors are already aware that interest rates will rise by 0.75% to 3.25%, so they are trying to determine the overall impact to the US economy and global financial markets. Most likely, the effect will be negative as rates above 3% are definitely restrictive, affecting the income of businesses, industrial activity and employment. Rising interest rates will hit companies that have high debts first, which will lead to a slowdown in production and beginning of layoffs. In this situation, the stock market may sink deeper, and many companies and businesses will go bankrupt. Treasury yields will also increase, which will lead to a rise in the cost of servicing the public debt by the US government. In the event of geopolitical tensions, no rate hikes, even by the ECB, will ease pressure in the market. This is because dollar is a safe haven asset and a better option in the face of military conflict in the Euro area. Another supporting factor for dollar is the decreasing demand for stocks, which was also brought upon by the increase in rates and the desire of the Fed to actively raise them further. The situation will only change if, at the press conference, Fed Chairman Jerome Powell announces that further plans on interest rates will depend on the incoming inflation data. Stocks and other commodities, such as gold, will rally at that time, while dollar will fall. This is because a decrease in inflation will prompt the Fed to ease the pace of rate increases, and then stop it altogether. Forecasts for today: USD/CAD The pair is trading above 1.3370. If the conflict in Ukraine intensifies, demand for dollar will surge, which will lead to a growth towards 1.3500. AUD/USD The pair fell below 0.6675 because of the escalation of crisis around Ukraine. If the Fed raises rates by 0.75%, the quote will dip further to 0.6585. Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322248
The Bank Of Japan Should Do The Opposite Of What Western Banks Are Doing

The Bank Of Japan Should Do The Opposite Of What Western Banks Are Doing

InstaForex Analysis InstaForex Analysis 21.09.2022 14:18
Today, the US Federal Reserve will finally announce its decision on interest rates and present new economic projections as well as the dot plot. On Wednesday morning, the futures market saw an 82% probability of a 75 basis point rate increase and an 18% chance of a hike by 100 basis points at once, which is in line with the earlier forecasts. Meanwhile, the greenback is edging higher but its upside potential is limited. During the day, demand for risk assets could increase as the Kremlin is preparing to hold a referendum in four partially occupied regions of Ukraine on joining Russia. This could trigger geopolitical jitters and change the course of the military confrontation. USD/CAD Inflation in Canada slowed to 7% in August from 7.6% in the previous month, beating economists' forecasts. Core inflation came at 5.8% versus 6.1% a month earlier. In this light, expectations of the hawkish Bank of Canada could ease, causing a drop in the loonie. The Canadian regulator will hold the board meeting in a week. Now there is a high probability of a more than 50 basis point rate rise. Otherwise, the Bank of Canada could choose to pause with tightening as the CPI, excluding food and energy prices, grew by 2.6% on a seasonally adjusted and yearly basis, the lowest rise since February 2021. In other words, with a slowdown in the inflation rate, the Bank of Canada could take some time – at least 5 weeks until the next meeting – to see how things unfold. The net long position on CAD dropped by 481 million in a week. CAD positioning is still bullish although bearish sentiment is increasing. Meanwhile, the fair value is rising. Last week, the target stood at the swing high of 1.3222, The quote broke through the barrier and approached the technical resistance level of 1.3335. The impulse is still strong and is unlikely to end any time soon. The new target is seen in the 1.3640/60 resistance zone. The price could approach the range already by the end of the week. USD/JPY In Japan, inflation hit 3% year-over-year in August, coming above market expectations. Still, Japan is not one of those countries that are now dealing with soaring inflation. Although the price of goods in the country accelerated by 5.7% year-over-year, the price of services saw an uptick of just 0.2% (49.54% of the whole index). This is due to a sluggish rise in wages and long-term prospects of decreasing internal demand amid the depopulation and aging of Japanese society. The Bank of Japan simply cannot set the same inflation target as in the West, given its significant structural differences. In other words, while other central banks, including the Federal Reserve and the ECB, are doing everything to tame inflation, the Bank of Japan should do the opposite. Therefore, the Japanese regulator will hardly change its stance on monetary policy. The Bank of Japan has recently checked to see how the yen is doing. It called dealers at commercial banks to find out about the current state of the foreign exchange market. The bank does this, expecting intervention from the government (the Minister of Finance), which is legally responsible for the country's exchange rate policy. Exchange rate checking serves a dual purpose. Firstly, it lets the market know that the government is ready to intervene. Secondly, it signals that the authorities are concerned about the speed of market change. Oftentimes, after such checks, the government intervenes to stabilize the yen, especially since the yield on 10-year bonds has been holding 1 point above the target (0.251%) for several days. In other words, intervention is the only thing that can be done. This is also a signal of an imminent inflow of liquidity. So, the yen is likely to deepen its weakening. The net short position on JPY is still increasing, with a weekly gain of 1.883 billion. The currency is likely to stay bearish, with the fair value above the long-term MA. In this light, short-term consolidation slightly below 145 is coming to an end and could be followed by a breakout above the mark. The psychologically important level stands at the next target of 147.71. Still, it could hardly be reached. The Federal Reserve's monetary stance is likely to be exactly the opposite of the Bank of Japan's in the long run. So, the yen will remain in a bear trend unless, of course, sudden geopolitical events change the balance of risk. Relevance up to 08:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322234
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Risk Aversion Grows As Ukraine War Scares Again | USD/CAD - Let's See How Much Has The Pair Gained This Week

Kenny Fisher Kenny Fisher 23.09.2022 16:31
The Canadian dollar is in negative territory for a fourth straight day. In the European session, USD/CAD is trading at 1.3522, up 0.24% on the day. The US dollar continues to shine, particularly against risk-sensitive currencies such as the Canadian dollar. USD/CAD has jumped 1.9% this week and the Canadian dollar has fallen to lows last seen in July 2020. Risk sentiment has eroded due to the escalation in the Ukraine war. The regions occupied by Russia are holding a referendum to join Russia, and no one has any doubt about the results. Russian President Putin has hinted that he could resort to nuclear weapons to defend “Russian territory” and he has also ordered a partial mobilization, as Ukraine presses on with an impressive counter-offensive. The energy crisis in Europe continues to brew – the Nordstream 1 pipeline has been out of service for several weeks, and Western European countries could face energy shortages, with winter only a few months away. Markets brace for soft retail sales Canada releases the July retail sales report later today. The markets are braced for a sharp downturn in consumer spending. The headline reading is expected at -2.0%, following a gain of 1.1% in June. Core retail sales is expected to fall by 1.8%, after a 0.8% gain in June. A sharp downturn could sour investors on Canada’s economic outlook and extend the Canadian dollar’s losses. Canada’s headline and core inflation indicators fell in August and were lower than expected. It’s still early to declare that inflation has peaked, but the BoC can declare a job well done if inflation is indeed falling. The BoC has been aggressive, delivering a 75bp increase earlier this month and bringing the benchmark to 3.25%. The markets have priced in a 50bp at the October meeting, followed by a modest 25bp hike in December. That would lift rates to an even 4.00%, which would be the highest since 2008, during the GFC. USD/CAD Technical USD is testing resistance at 1.3529. The next resistance line is 1.3615 There is support at 1.3414 and 1.3274 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. CAD extends losses, retail sales next - MarketPulseMarketPulse
Bank of England survey highlights easing price pressures

The Trend Of The Pound (GBP) And The Actions Of The Bank Of England (BoE) Have A Strong Correlation

InstaForex Analysis InstaForex Analysis 27.09.2022 10:42
Pound tumbled to a record low on Monday due to concerns over the stability of the UK's financial position. It followed a strong decline last Friday, which occurred because of the widespread demand for the dollar in the context of the global crisis and geopolitical tensions, as well as the new UK Treasury Chief Kwasi Kwarteng's announcement that the government will implement the biggest tax cut in 50 years while increasing government borrowing and spending despite high inflation. The measures have raised expectations that the Bank of England may go for an emergency increase in the discount rate to strengthen market confidence and the national currency. In addition to the problems mentioned above, the UK is facing weak economic statistics. Business activity in the manufacturing sector reportedly fell below 50 points, which is bad for the economy. If the situation does not change, the pound will fall to parity with the dollar. Perhaps, there may be a local rebound in GBP/USD, but the main trend will be downward until the Bank of England decides on a sharp increase in rates. Forecasts for today: USD/CAD The pair is trading below the support level of 1.3675. A decrease in negative sentiment, local rebound in stock indices and strong rise in oil prices may prompt a further fall to 1.3575. USD/JPY The pair faced resistance at 144.80. But if market sentiment improves, it will bounce back to 143.15.   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322744
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Sell-off In Oil Prices Added To The Pressure On Canadian Dollar (CAD)

Saxo Bank Saxo Bank 27.09.2022 13:25
Summary:  The Bank of England’s response to the downdraft in sterling since late last week was rather lacking, as the bank merely indicated it will address the situation at the next regularly scheduled meeting. They may not have that luxury unless this brightening of global risk sentiment that has materialized overnight has legs. Elsewhere, traders continue to steer clear of challenging Japan’s Ministry of Finance on intervention despite a fresh surge in US treasury yields yesterday. FX Trading focus: Bank of England response to sterling crisis rather muted, but a broad sentiment shift might keep them off the hook near term. The Bank of England’s response yesterday to the enormous downdraft in sterling was not as dramatic as those looking for a kneejerk hike this week might have expected. The Bank issued a short statement, which merely indicated that it is aware of what the government is doing and will take that and sterling’s moves into consideration at the next regularly scheduled meeting on November 3. Perhaps the phrase that it “will not hesitate to change interest rates by as much as needed to return inflation to the 2% target” that saved sterling from a further pounding just yet. There are two ways to look at this: the BoE doesn’t want to be seen as panicking and jerked around by market developments. On the other hand, it would have been more hawkish to avoid mention of the next regularly scheduled meeting to suggest that we might infer a rate hike is possible at any time if the sterling volatility worsens again. In support of sterling, the overall rate expectation for the November 3 meeting remains pinned just below 150 basis points this morning, a very large rate hike indeed when your policy rate is 2.25%. We may not have seen the cycle low in sterling, but in the nearest term, a rally in risk sentiment can keep sterling in consolidation mode tactically after the trauma of the last couple of sessions. Chart: USDCADRemarkable to see USDCAD extending the rally yesterday at an even more rapid pace than the one established over the last couple of weeks, the kind of price action one often associates with at least a temporary climax in the trend. A fresh sell-off in oil prices added to the pressure on CAD and NOK as well. But that trend has extended so far and so quickly that the USDCAD pair can easily retrace to 1.3500 without meaningfully softening the up-surge, and today’s price action suggesting we may avoid a correction even to that level. Since the early 2000’s, USDCAD has only traded above yesterday’s 1.3800+ highs on two occasions – for a couple of months when oil collapsed during the pandemic outbreak in the spring of 2020 and during a short episode during the USD peak of late 2015/early 2016. The coming recession may prove more vicious in Canada relative to the US, given very elevated private debt levels in Canada, much of it associated with housing. Mortgage financing is generally 25 year mortgages that roll every 5 years. That 5-year mortgage rate has risen to levels similar to the US 30-year rate around/above 6%. In the US, the vast majority of mortgages are 30-year fixed, meaning no real impact for most homeowners who are staying put with existing mortgages, but a far faster and greater impact on Canadian mortgage holders who must roll to the new and suddenly vastly higher rates. As discussed in this morning’s Saxo Market Call podcast, it will be very interesting to watch the evolution in the US Consumer Confidence survey of the spread between the Present Situation and Expectations components, which reached their lowest levels since 2001 in July. The latest September survey is up today. Typically this spread bottoms out and is rising quickly as the US economy is tilting into recession. As this survey is historically closely correlated with the labor market, any rise in the spread would likely be preceded by a couple of months of clearly rising jobless claims. On that front, we hit record lows in claims (adj. for population) back in March, followed by a significant surge into July. Since then, the lower claims suggest a still-strong labor market, but another turn and rise above a 250k weekly run puts us on a countdown toward a recession and peak Fed tightening expectations. We are likely at an inflection point in Q4 as the real wear on the economy from policy tightening is picking up pace, given the 9-12 month lag of policy, which may be more compressed this time given the vicious pace of the tightening once it got underway. It’s remarkable to recall that the Fed only achieved lift-off from effective zero in March, with treasury yields beginning to surge, however, already in late 2021 and accelerating higher in January. Table: FX Board of G10 and CNH trend evolution and strength.Nothing much new here, but the readings are extreme in USD strength and GBP weakness, while development around the edges are interesting, including whether the broad JPY bounceback can hold and the degree of relative weakness in CNH as the key 7.20 level approaches in USDCNH and the jockeying amongst the G-10 smalls. Table: FX Board Trend Scoreboard for individual pairs.NOKSEK is pressing on a major level at 1.0500 as cratering oil prices and crazy messaging from the Norges Bank have NOK under pressure – crazy volatility in today’s session, by the way. Elsewhere, note the pump and reversal in AUDNZD – was that at least a temporary top for now there? Upcoming Economic Calendar Highlights 1100 – UK Bank of England Chief Economist Pill to speak 1100 – ECB's Villeroy to speak 1130 – Fed Chair Powell to speak on digital currencies 1230 – US Aug. Preliminary Durable Goods Orders  1300 – US Jul. S&P CoreLogic Home Prices 1355 – US Fed’s Bullard (voter 2022) to speak 1400 – US Sep. Consumer Confidence 1400 – US Aug. New Home Sales 1700 – US 5-year Treasury Auction 1700 – US Fed’s Kashkari (voter 2023) to speak 2350 – Japan Bank of Japan meeting minutes 0130 – Australia Aug. Retail Sales    Source: https://www.home.saxo/content/articles/forex/fx-update-boe-response-rather-muted-but-big-hikes-still-baked-in-27092022
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

The Price Of USD/CAD Maintains A Bullish Bias Despite A Temporary Correction

InstaForex Analysis InstaForex Analysis 29.09.2022 09:04
The USD/CAD pair plunged yesterday as the Dollar Index crashed after registering a strong leg higher. The price maintains a bullish bias despite a temporary correction. It could come back to test and retest the near-term obstacles trying to attract more buyers and accumulate more bullish energy. The pair was trading at 1.3656 at the writing above 1.3602 yesterday's low. Fundamentally, the pair crashed also after the US Pending Home Sales and the Prelim Wholesale Inventories came in worse than expected yesterday. Today, the Canadian GDP is expected to report a 0.1% drop, while the US Final GDP could register a 0.6% drop. The economic data could be decisive in the short term. The US Unemployment Claims indicator is expected to jump from 213K to 215K in the last week. USD/CAD Up-Channel! USD/CAD failed to stabilize below the broken uptrend line and under the median line (ml) signaling exhausted sellers. Poor Canadian data and better-than-expected US figures could increase the rate. The 1.3639 and 1.3602 levels represent downside obstacles. The false breakout through the channel's upside line technically announced a sell-off. USD/CAD Forecast! A new lower low, dropping and closing below 1.3602 activates more declines and brings short opportunities. On the other hand, by staying above the uptrend line and beyond 1.3639, the USD/CD pair may develop a new bullish momentum towards the R1 (1.3720) and up to the upper median line (uml).   Relevance up to 07:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294745
China's Deflationary Descent: Implications for Global Markets

A Strong Bearish Signal For The Equity Markets And A Significant Support Factor For Dollar (USD)

InstaForex Analysis InstaForex Analysis 29.09.2022 12:03
Stock markets in Europe and North America bounced back on Wednesday, thanks to growing demand for US Treasuries, which put pressure on their yields and dollar. There were no special reasons for growth, but the closing of short positions after a multi-day sell-off helped the markets recover the previous losses. However, the hawkish rhetoric of the Fed pointed to a continued increase in interest rates in the foreseeable future, so stock futures started to decline again today. Minutes ahead of the European trading session, the yield on 10-year bonds grew by 3.15% to 3.824%, while futures fell from 0.36% to 0.70%. This is a strong bearish signal for the equity markets and a significant support factor for dollar. Due out today is Germany's data on consumer inflation and revised US GDP figures for the second quarter. Forecasts say the former will rise to 1.3% m/m and 9.4% y/y, which will prompt the ECB to raise rates again by 0.75%. But this is unlikely to stimulate a strong growth in euro as the currency is affected by the current economic situation in the Eurozone. The latter, meanwhile, is expected to show a slight decrease to -0.6%, but a much larger fall will put pressure on market sentiment, which will increase the sale of stocks and purchases of dollar. Forecasts for today: USD/CAD The pair is currently testing the level of 1.3715. If it rises above it, further growth to 1.3835 is possible, especially amid a decline in crude oil prices and general negative dynamics in the markets. USD/JPY The pair is currently testing the resistance level of 145.00. If it rises above it, further growth to 146.00 is possible, especially amid a general negative dynamics in the markets and resumption of growth in the yield of US Treasuries.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323002
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Volatility Is In The Currency Markets This Week|USD/CAD Pair Has Jumped

Kenny Fisher Kenny Fisher 29.09.2022 14:06
The Canadian dollar continues to show sharp volatility this week. USD/CAD has jumped 0.65% today and is trading at 1.3693. We are seeing significant volatility in the currency markets this week, with weaker risk appetite propelling the US dollar higher. The Canadian dollar been hit by the double whammy of an aggressive Federal Reserve and an escalation in the war in Ukraine which has dampened risk appetite. It has been a miserable September for the Canadian dollar, as USD/CAD has climbed 4.5%. There are additional headwinds for the Canadian dollar. The Bank of Canada has led the way with a fast pace of tightening, raising its benchmark rate to 3.25%. The Federal Reserve has caught up with last week’s 0.75% hike, and the markets are pricing in a higher terminal rate for the US than for Canada (4.60% vs. 4.10%). This means that the Canadian dollar will not benefit from a higher interest rate differential, and Canadian bond yields have fallen below US Treasuries. As well, Canada is a major oil exporter and the drop in the price of oil is weighing on the Canadian dollar. We are already seeing a sharp drop in long positions in the Canadian dollar, and that trend could continue. Markets brace for decline in GDP Canada releases the July GDP report later today. The economy is showing little movement and gained a negligible 0.1% in June. The consensus for July is a decline of 0.1%. A sharper drop than expected could sour investors on the Canadian economy and extend the Canadian dollar’s losses. . USD/CAD Technical USD is testing resistance at 1.3725. The next resistance line is 1.3862 There is support at 1.3477 and 1.3340 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The Data Will Affect The USD And Provide A Fresh Impetus To The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 30.09.2022 13:04
USD/CAD gains traction for the second straight day, though lacks follow-through. Subdued crude oil prices undermine the loonie and act as a tailwind for the pair. Retreating US bond yields, a positive risk tone weighs on the USD and caps gains. The USD/CAD pair attracts some dip-buying in the vicinity of the mid-1.3600s and sticks to modest intraday gains through the first half of the European session. The pair maintains its bid tone for the second successive day and is currently trading just above the 1.3700 mark, well within this week's broader trading band. A combination of factors drags the US dollar to a one-week low, which, in turn, acts as a headwind for the USD/CAD pair. The spill-over effect of the UK central bank's move to calm the markets drags the benchmark 10-year US Treasury note away from a 12-year high touched on Wednesday. Apart from this, a goodish recovery in the global risk sentiment further weighs on the safe-haven greenback. That said, subdued price action around crude oil prices undermines the commodity-linked loonie and continues to lend some support to the USD/CAD pair, at least for the time being. Worries that a deeper global economic downturn will dent fuel demand offset global supply concerns and fail to assist the black liquid to capitalize on this week's goodish recovery from the lowest level since January 2022. Furthermore, firming expectations for a more aggressive policy tightening by the Fed should limit the fall in the US bond yields and favours the USD bulls. Investors seem convinced that the US central bank will hike interest rates at a faster pace to curb inflation. Hence, the focus remains on the release of the US Personal Consumption Expenditures. (PCE) - the Fed's preferred inflation gauge. Friday's US economic docket also features the release of the Chicago PMI and the revised Michigan Consumer Sentiment Index. The data, along with the US bond yields and the broader risk sentiment, will influence the USD and provide a fresh impetus to the USD/CAD pair. Traders will further take cues from oil price dynamics to grab short-term opportunities on the last day of the week
CEE: Busy Week Ahead Drives FX Strength

The Financial Meltdown Continues At Full Speed

Swissquote Bank Swissquote Bank 30.09.2022 14:41
It was a terribly ugly day across the equity and bond markets yesterday. Despite the financial calamity, Porsche had a successful IPO and secured the valuation it was looking for, but the S&P500 plunged another 2% yesterday and wiped out the summer gains entirely. The same is true for Nasdaq. Nothing is left from the summer rally in the US stocks. Job cuts Apple dived more than 6% and closed the session almost 5% lower yesterday, after Bank of America downgraded the stock on worries of weaker consumer demand. Facebook’s Meta joined the others in announcing job cuts. But *unfortunately* for the Federal Reserve (Fed), the US jobless claims came below 200’000 last week. There are not enough people losing their jobs to stop the financial bleeding in the world. One interesting thing about yesterday’s price action was that... the US dollar sharply eased despite the hawkish messages thrown to our faces by the pitiless Fed members. The British pound recovered above the 1.11 mark against the US dollar yesterday. Could the pound rebound sustainably, or is this just a fake alert? Watch the full episode to find out more! 0:00 Intro 0:32 Porsche IPO went well, but… 4:20 Apple nosedived amid BoFA downgrade 6:47 Why did the US dollar ease? 8:42 Could sterling recover sustainably? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoE #intervention #UK #gilt #GBP #EUR #USD #Fed #Apple #Meta #Porsche #IPO #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH    
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Forex: Canadian Dollar (CAD) And Norwegian Krone (NOK) May Go Up Thanks To OPEC+ Cutting Supply

ING Economics ING Economics 03.10.2022 13:33
The pound has reversed back to pre 'fiscal event' levels on news of a policy U-turn. A holiday in China this week might introduce slightly calmer conditions to FX markets, but prospects of another solid US jobs report on Friday should keep the dollar bid on dips USD: FX intervention can only slow, not reverse trends We are focusing on four points this morning. 1) The potential for OPEC+ supply cuts. 2) FX intervention from Japan and possibly China too. 3) The close first round elections result in Brazil and 4) the prospects for Friday's US jobs report. Media reports suggest OPEC+ (meeting Wednesday) will push for a 1mn barrel per day cut in production. Oil experts will have to tell us why the Saudis will want this, but suffice to say it seems President Biden's visit to the region this summer has failed to deliver the desired supply increases. Indeed, it is a strange period when OPEC+ may be looking at a large supply cut while the US is still selling strategic petroleum reserves. The prospects of an OPEC+ supply cut may offer some brief support to the beleaguered Canadian dollar and Norwegian krone, but given a challenging risk environment, we doubt these high beta currencies can hold any near terms gains. Friday saw Japan announce that the central bank had bought close to US$20bn of yen in its intervention late last month. Remember this was the first yen buying since 1998. This will be the start of a campaign from Japanese authorities who can only hope to slow, not reverse the USD/JPY uptrend. Indeed, USD/JPY traded up above 145 again overnight and we should probably expect more intervention around these levels shortly. On the subject of intervention, China may well have intervened above 7.20 in USD/CNY last week. Unlike the Japanese, Chinese authorities do not report FX intervention activity. It is a holiday this week in China, so the 7.20 level may not be challenged again until next week. Sunday's Presidential vote in Brazil saw a much closer vote than expected. A run-off will be held between Lula and Bolsonaro on 30 October. Some are saying that Brazilian assets should rally on the news that Bolsonaro has a better chance of retaining power than initially thought. However, the much closer vote than expected leaves open the prospect of a disputed election outcome. As we have seen in the UK recently, the external environment is very unforgiving at the moment. And with reports of $70bn of portfolio flows having left emerging markets this year, another month of campaigning and the prospects of a close vote could see USD/BRL make a run at 5.60. Finally, the highlight of this week's US data calendar will be Friday's release of the September jobs report. Our team looks for a solid 200k increase in jobs and the unemployment rate staying low at 3.7% - both pointing to another 75bp hike from the Federal Reserve on 2 November.  DXY has corrected around 2.5% from its highs seen last week. We are in the camp favouring stronger levels later this year and feel that this correction under 122 will be short-lived. Chris Turner EUR: PMIs in focus Today will see the final September PMIs for the eurozone, with the manufacturing component expected to remain near 48.5, in contraction territory. News that OPEC+ wants to increase oil prices will not be welcomed across the region. Equally weekend reports suggest that what little remains of Russian gas exports to Europe may dwindle as well - e.g. Italy. As in the UK, the focus in the eurozone is also shifting to the size of fiscal support packages and whether local bond markets can easily digest them. EUR/USD is holding its gains from last week after the Bank of England stepped in to stabilise the Gilt market. One could argue that intervention (both FX from Asian authorities and in the bond market from UK authorities) is delivering this pause in the dollar's bull trend. But the macro factors which are driving it remain firmly in place and 0.9850/9870 could prove the limit to the current EUR/USD bounce. Favour a retest of 0.95 in October. Chris Turner GBP: Policy U-turn As we go to publication, GBP/USD is just enjoying another leg higher on reports that the Liz Truss government will formally reverse its planned abolishment of the 45% income tax bracket. Our UK team feels this move is rather symbolic, being less about the amount of money it will save (low billions) and more about the poor signal it had delivered of ideological (unfunded) tax cuts. The move looks driven by a backlash from her own party and perhaps the threat of a sovereign rating downgrade, where the S&P rating agency on Friday shifted the UK outlook to negative from stable in an unscheduled move. We will not be churlish here and say this will not affect the pound. Yet cable has today returned to levels seen just before Chancellor Kwasi Kwarteng delivered the infamous 'fiscal event' and it would now be hard to argue that cable should be trading much higher than that. But this does alleviate the risk of cable trading to parity in that it shows Downing Street will show greater respect to financial markets when considering policy options. Maybe we see a new cable trading range of something like 1.1000-1.1350. EUR/GBP may find support under 0.8700 now. Chris Turner CEE: Second-round of central bank decisions We start this week with PMIs across the region. In Poland and the Czech Republic, we expect further declines to new record lows since Covid levels. In Hungary, on the other hand, we expect a slight improvement. The Polish and Romanian central banks will meet on Wednesday, following the National Bank of Hungary and Czech National Bank last week. In Poland, we expect a 25bp rate hike to 7.0%, the same pace as in September, in line with surveys. However, inflation released on Friday surprised significantly to the upside and investors moved to the hawkish side of the market. In Romania, we expect a 50bp rate hike to 6.0%, in line with surveys. The central bank already slowed the pace of rate hikes in August, and we expect the same this week. Industrial production and retail sales data for August in the Czech Republic and Hungary will be released on Thursday and Friday. With the exception of Hungarian retail sales, we expect an improvement in year-on-year figures. However, the higher number of working days than last year is playing into the hands of both countries this time. On the FX side, this week we will continue to follow the gas story and the geopolitical situation. However, at the end of last week we saw gas prices fall again, EUR/USD higher and interest rate differentials rise across the region under pressure from weaker FX. Altogether, we think this week should lead to a calming of the situation and erase some of last week's losses. We see the Hungarian forint as the most undervalued at the moment. This week, the NBH will launch the previously introduced measures to withdraw excess liquidity from the market, which we believe will bring calm and the forint should return to 410 EUR/HUF. The Polish zloty from earlier in the week should benefit from the recent increase in rate differentials after Friday's CPI and return closer to 4.80 EUR/PLN. However, Wednesday's National Bank of Poland meeting should bring disappointment to the markets and leave the zloty in the current range. We expect the Czech koruna to return to the 24.60-70 EUR/CZK intervention band after the closing of short positions connected to the CNB meeting last week. In the second half of this week, we should see in the data how much the central bank spent last week when the koruna came under pressure for the first time since the August CNB meeting, which should tell us more about the sustainability of the current FX regime. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oil Could Be Ready To Pop, The Bank Of England Market Pricing Is More Mixed

The Barrel Of West Texas Intermediate (WTI) Gained More Than 3%

TeleTrade Comments TeleTrade Comments 05.10.2022 13:01
USD/CAD gathered bullish momentum early Wednesday following two-day slide. WTI trades in negative territory as markets wait for OPEC+ to unveil output strategy. The dollar benefits from safe-haven flows amid escalating geopolitical tensions. After having lost nearly 300 pips in a two-day slide, USD/CAD reversed its direction and climbed toward 1.3600 on Wednesday. As of writing, the pair was trading at 1.3570, where it was up 0.45% on a daily basis. WTI turns south ahead of OPEC+ decision The sharp upsurge witnessed in crude oil prices helped the commodity-sensitive loonie outperform its rivals earlier in the week. On reports claiming that OPEC+ could reduce crude oil production by as much as 2 million barrels per day, the barrel of West Texas Intermediate (WTI) gained more than 3% and climbed to its highest level since mid-September at $87 on Tuesday.  The negative shift witnessed in the risk mood, however, seems to be causing oil prices to edge lower mid-week and doesn't allow the CAD to preserve its strength. OPEC+ is set to unveil its output strategy later in the day and the European Union is expected to introduce a new sanctions package against Russia that will most likely include a cap on oil prices. Meanwhile, US stock index futures are down sharply as geopolitical tensions continue to escalate. Russian President Vladimir Putin is reportedly planning to address the nation and announce a change in the status of the "special operation." Russia's ambassador warned earlier in the day that the US' decision to send more military aid to Ukraine would raise the danger of a direct clash between Russia and the west. In the second half of the day, the US economic docket will feature the ADP's private sector employment data and the ISM's Services PMI survey. 
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Be Careful With Bearish Bets Around The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 06.10.2022 10:01
USD/CAD meets with a fresh supply on Thursday amid the emergence of some USD selling. The overnight rally in oil prices underpins the loonie and further contributes to the downtick. Hawkish Fed expectations could act as a tailwind for the buck and lend support to the pair. The USD/CAD pair extends the overnight pullback from the vicinity of the 1.3700 mark and edges lower through the first half of trading on Thursday. The pair is currently placed near the lower end of its daily trading range, around the 1.3570-1.3575 region, down nearly 0.30% for the day. The US dollar struggles to capitalize on the previous day's solid bounce from a two-week low and meets with a fresh supply, which, in turn, exerts pressure on the USD/CAD pair. A modest downtick in the US Treasury bond yields, along with a recovery in the risk sentiment, further drives flows away from the safe-haven greenback. Apart from this, the recent bullish run in crude oil prices underpins the commodity-linked loonie and contributes to the offered tone surrounding the USD/CAD pair. The black liquid shot to a three-week high after OPEC+ agreed to tighten the global supply and slash production by about 2 million bpd - the largest reduction since 2020. That said, concerns that a deeper global economic downturn will dent fuel demand keep a lid on any further gains for the black liquid. Furthermore, expectations for a more aggressive policy tightening by the Fed should act as a tailwind for the US bond yields and the buck, which, in turn, should offer support to the USD/CAD pair. Fed officials reiterated the US central bank's commitment to getting inflation under control and reaffirmed bets for another supersized 75 bps rate hike at the November FOMC meeting. This warrants caution before placing bearish bets around the USD/CAD pair ahead of the monthly employment details from the US and Canada on Friday. In the meantime, traders on Thursday will take cues from the release of the US Weekly Initial Jobless Claims data and Canadian Ivey PMI. Apart from this, speeches by FOMC members and the Bank of Canada Governor Tiff Macklem should provide some meaningful impetus to the USD/CAD pair later during the early North American session.
The USD/CAD Pair Has The Strong Downside Momentum

USD/CAD May Not Feel That Fine After The Release Of Exports, Gold Price May Be Doing The Same As US Dollar Index Has Been Up In The Morning

Jing Ren Jing Ren 06.10.2022 14:42
In this article: USDCAD Gold Price US Crude Oil Price Check out our video comment on RBA decision:   USDCAD consolidates The Canadian dollar struggles over lacklustre August export data. A bearish RSI divergence showed a slowdown in the upward momentum while a double top at 1.3830 further suggested exhaustion in the current rally. The pair is prone to a correction after it fell below 1.3600. The uptrend remains intact but the recent parabolic rise could use some breathing room to let the bulls accumulate again. 1.3420 on the 20-day moving average is an area of interest. The support-turned-resistance at 1.3700 is the first hurdle. XAUUSD hits resistance Gold clawed back losses as the dollar index bounces higher. A sharp recovery has lifted bullion back to September’s high at 1730 which is an important level on the daily chart. As the RSI soared into the overbought area, fresh selling from trend followers in conjunction with profit-taking has kept the rally in check. A bullish breakout would force the short side to cover, stirring up volatility in the process. The psychological level of 1700 is a fresh support and its breach may extend losses to 1660. USOIL tests key resistance WTI crude bounced higher after OPEC+ agreed to cut output. The rebound has gained a foothold after it cleared the supply zone around 83.00. The price is testing the daily resistance and psychological level of 90.00 and stiff pressure could be expected from the sell side. However, sentiment may brighten up in the short-term if the bulls manage to push past this ceiling, clearing the path towards 97.00. As the RSI inches back into overbought territory, 86.00 has turned into a support in case of a pullback.
The USD/CAD Pair: US Dollar (USD) Bulls Will Put Assets To A New Two-Year High

The USD/CAD Pair: US Dollar (USD) Bulls Will Put Assets To A New Two-Year High

TeleTrade Comments TeleTrade Comments 07.10.2022 09:32
A formation of a bullish flag is setting a base for recording fresh two-year highs around 1.4000. Market sentiment has turned negative which supports the greenback’s appeal. The RSI (14) is aiming to enter into the bullish range of 60.00-80.00. The USD/CAD pair has rebounded firmly after hitting an intraday low of 1.3726 in the Tokyo session. The asset is oscillating around 1.3750, at the press time, and is expected to overstep the same confidently as the market sentiment has turned extremely sour amid soaring hawkish Federal Reserve (Fed) bets. Also, the S&P500 has eased off its entire gains recorded in the Tokyo session. On a four-hour scale, the asset is forming a Bullish Flag pattern that signals an impulsive bullish wave after the breakout of the consolidation. Usually, the consolidation phase indicates a most auctioned region where those investors place bets who prefers to enter an auction after the establishment of an upside bias. Also, investors add more longs as they see a continuation of the uptrend after a time-corrective pause. It is worth noting that the 20-and 50-period Exponential Moving Averages (EMAs) have defended their bearish crossover at around 1.3600, which indicates that the upside is intact. Meanwhile, the Relative Strength Index (RSI) (14) is attempting to cross the 60.00 figure for a sheer bullish momentum. Should the asset break above the previous week’s high at 1.3833, the greenback bulls will expose the asset to hit a fresh two-year high at 1.4000. A breach of the latter will drive the major towards May 2020 high at 1.4173. On the contrary, a decisive break below the round-level support placed at 1.3600 will drag the asset towards the psychological support at 1.3500, followed by September 19 high at 1.3344. USD/CAD four-hour chart  
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Today's US Employment Data May Influence The Fed's Actions

InstaForex Analysis InstaForex Analysis 07.10.2022 11:57
Investors coming up with a reason to buy risky assets do not stop. Earlier, before the Fed meeting in September, many actively discussed whether the Fed would ease the pace of rate hikes under market pressure. But what happened was the opposite as after the meeting, the central bank raised rates to the previously announced 0.75%. This caused the collapse of the US stock market and with it the European and other markets. And now, after the RBA did not raise the rate by the promised percentage, investors became excited again, deciding that it was the situation on the US labor market that could be the reason why the Fed will shift its stance on interest rates. But the employment report from ADP was not as expected since the number of jobs was above the forecast of 200,000, reaching 208,000. This caused the end of the two-day rally, and led to new declines in stock indices. For today, the upcoming employment data in the US will be important. Forecasts say there should be 250,000 new jobs in September against 315,000 in August. If the data turns out to be lower than expected, hopes that the Fed will reduce the growth of rates will surge, which may cause a local increase in stocks and a decline in dollar. Forecasts for today: EUR/USD The pair is trading below 0.9810. It may rise to 0.9920 if positive sentiment prevails today after a weak US employment data. USD/CAD The pair is trading above 1.3720. If the data on the number of new jobs in the US is below expectations, it may fall to around 1.3600.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323698
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

By Being The Leading Oil Exporter To The USA, Canada Can Strengthen Its Fiscal Balance

TeleTrade Comments TeleTrade Comments 10.10.2022 10:17
USD/CAD is preparing for a break above 1.3750 as DXY has refreshed its day’s high at 112.94. The tight US labor market has filled the Fed with confidence for announcing a bigger rate hike in November. The loonie bulls have failed to capitalize on better-than-projected Canada employment data. The USD/CAD pair is aiming to demolish the back-and-forth moves structure that remained in a narrow range of 1.3720-1.3740 in the early European session. The asset is preparing for an impulsive rally following the footprints of the US dollar index (DXY). The DXY has refreshed its day’s high at 112.94On a broader note, the asset is oscillating around the weekly hurdle of 1.3750 and may remain in the bullish arena amid negative market sentiment. The release of the upbeat US Nonfarm Payrolls (NFP) data on Friday has pumped the odds of a 75 basis point (bps) rate hike by the Federal Reserve (Fed). The upbeat economic catalyst has terrified investors, which has resulted in a bearish performance by S&P500. Also, the 10-year US Treasury yields have reached near 3.90%. A tight labor market has provided confidence to the Fed to announce a bigger rate hike unhesitatingly. A fourth consecutive 75 bps rate hike announcement by the Fed will push the interest rates to 3.75-4%, close to the targeted rate of 4.4%, as discussed in September’s dot plot. Going forward, the US Consumer Price Index (CPI) data will remain in limelight. Previously, the headline CPI dropped to 8.3%, however, the core CPI was escalated. It is expected that weaker gasoline prices will keep the headline CPI in check, therefore, the spotlight will remain on the core CPI. As per the consensus, the economic data is expected to improve to 6.5% from the prior release of 6.3%. Meanwhile, loonie bulls have failed to capitalize on better-than-projected employment data. The Net Change in Employment landed at 21.1k, higher than the projections of 20k. Also, the Unemployment Rate declined to 5.2% from the expectations and the prior release of 5.4%. On the oil front, the announcement of the production cuts by OPEC+ has titled the short-term trend towards the north. Apart from that, the reopening of China after a golden week holiday is promising that the demand for oil will pick up as Chinese manufacturing activities were shut down during the holiday period.  It is worth noting that Canada is a leading oil exporter to the US and higher fund inflows will strengthen its fiscal balance sheet.
The Canadian Dollar Is Likely To Remain On Tenterhooks

The Overall Risk Profile Of The USD/CAD Pair Is Extremely Negative

TeleTrade Comments TeleTrade Comments 12.10.2022 10:06
USD/CAD has reclaimed the immediate hurdle of 1.3800 after a knee-jerk reaction. Market mood is getting mixed which advocates volatility ahead. Oil prices drop after the IMF cuts 2023 GDP projections. The USD/CAD pair has recovered sharply after a knee-jerk reaction to near 1.3783 in the early European session. The asset is aiming to knock the day’s high at around 1.3830 as the overall risk profile is extremely negative ahead of the US inflation data. The 10-year US Treasury yields have recovered some of their losses after dropping to near 3.9%. The mighty US dollar index (DXY) has also picked bids after dropping to near 113.00, however, confidence in the rebound move is absent. It would be worth watching whether the asset will recapture its fresh weekly highs at 113.60. This week, the mega event will be the US Consumer Price Index (CPI) data, which will release on Thursday. As per the preliminary estimates, headline inflation will drop to 8.1% due to weak gasoline prices. While, the core CPI that doesn’t inculcate oil and food prices for calculation will release at 6.5%, higher than the prior print of 6.3%. But before that, the release of the Federal Reserve (Fed) minutes will be keenly watched. The minutes will also provide viewpoints of all Fed policymakers toward interest rate targets for bringing price stability. On the oil front, oil prices have dropped sharply to near $87.00 after the International Monetary Fund (IMF) cuts global growth projections. The institution has trimmed its 2023 global Gross Domestic Product (GDP) forecast to 2.7%, 20 basis points (bps) lower than expectations made in July, keeping the 2022 projections unchanged at 3.2%. It is worth noting that Canada is the largest exporter of oil to the US and weak oil prices will weaken Canada’s fiscal balance sheet.
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

The US Inflation Data Will Influence Fed Decisions

InstaForex Analysis InstaForex Analysis 13.10.2022 11:09
The Federal Reserve is faithful to aggressive monetary tightening despite cooling down in the labor market and a slowdown in the US economic growth. The Fed's minutes of the September policy meeting released on Wednesday confirms the case that the Federal Reserve would continue its aggressive monetary policy on track in the long term until inflation declines to the annual target rate of around 2%. In this context, the US inflation data which is due today will determine the next Fed's policy move in terms of the rate hike's degree. According to the consensus, the annual CPI is expected to edge down in September to 8.1% following an 8.3% increase in August. On the contrary, the CPI could have climbed 0.2% on month following a 0.1% uptick in August. The actual CPI readings will be on tap tonight. The factory inflation data released on Wednesday was dismal. Instead of the expected decline to 8.4% on year from 8.7% in the previous month, the actual PPI slipped to 8.5% in September. Besides, the PPI grew to 0.4% on month against the expected 0.2% rise. How are financial markets and the currency market in particular likely to respond to the data on consumer inflation? I assume that if the actual score reveals a similar dynamic as the factory inflation, namely a notably increase in September and the annual print higher than expected, the stock market will respond with a new wave of sell-offs. The commodity market will also be hit by selling. In contrast, the US dollar will again receive support as a safe haven asset. In turn, stock indices will creep down because stocks will come under pressure from rising borrowing costs. Commodities can be also weighed down by the fact that the global economy is on the verge of a recession. Yields of the benchmark 10-year Treasuries could surpass the landmark level of 4% and grow higher which is another serious factor to reinforce the greenback's strength. Intraday outlook EUR/USD The currency pair is consolidating slightly above 0.9670. The news of inflation acceleration in the US could boost demand for the US dollar. As a result, EUR/USD could break this level and fall to 0.9550. USD/CAD The currency pair is trading with minor fluctuations and might extend its growth to 1.3950 after the level of 1.3850 is broken after the release of the US inflation data.   Relevance up to 08:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/324181
The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

The Recovery In Oil Prices Is Having A Negative Impact On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 13.10.2022 11:57
USD/CAD trims a part of its modest intraday gains, though the downside remains cushioned. A goodish bounce in crude oil prices underpins the loonie and acts as a headwind for the pair. Aggressive Fed rate hike bets continue to lend support as traders await the key US CPI report. The USD/CAD pair struggles to capitalize on its modest intraday uptick and retreats a few pips from the daily high touched during the early European session. Spot prices, however, manage to hold above the 1.3800 round-figure mark as investors prefer to stay on the sidelines and brace for the crucial US consumer inflation figures. In the meantime, a goodish recovery in crude oil prices seems to underpin the commodity-linked loonie and acts as a tailwind for the USD/CAD pair. The fundamental backdrop, however, still seems tilted in favour of bullish traders and supports prospects for an extension of the recent rally from the 1.3500 psychological mark. Hence, any meaningful pullback might still be seen as a buying opportunity and is more likely to remain limited. Investors remain worried that a deeper global economic downturn and a resurgence in COVID-19 cases in China will hurt fuel demand. In fact, OPEC on Wednesday lowered its global oil demand growth estimates for both 2022 and 2023. This, to a larger extent, overshadows the initial enthusiasm over the OPEC+ decision last week to slash production by the most since the 2020 COVID pandemic and should cap any meaningful recovery for the black liquid. The US dollar, on the other hand, is seen consolidating its recent gains recorded over the past week or so, though remains well supported by more hawkish cues from the Federal Reserve. In fact, the minutes from the last FOMC meeting on September 20-21 released on Wednesday showed that officials remain committed to raising interest rates to curb inflation. Hence, the focus remains glued to the crucial US CPI report, due later during the early North American session. Given that US Producer Price Index climbed more than expected in September, investors anticipate consumer inflation to remain stubbornly high and reinforce the Fed's hawkish rhetoric. This, in turn, favours the USD bulls and adds credence to the near-term positive outlook for the USD/CAD pair. That said, repeated failures to make it through the 1.3840-1.3850 supply zone warrant some caution before positioning for any further appreciating move.
The Bank Of Canada Focuses Only On Ensuring Price Stability

The Bank Of Canada Focuses Only On Ensuring Price Stability

TeleTrade Comments TeleTrade Comments 17.10.2022 08:41
USD/CAD has resumed the downside journey after the termination of the short-lived pullback. The emergence of the risk-on impulse has weakened the safe haven’s appeal. A bleak economic outlook is weighing pressure on oil prices. The USD/CAD pair has displayed a less-confident pullback after printing an intraday low of 1.3812 in the Asian session. The asset is expected to resume its downside momentum after the termination of the pullback as the risk impulse rebounded after turmoil on Friday. S&P500 is withholding its gains recorded on early Monday despite rising bets for a hawkish Federal Reserve (Fed). The US dollar index (DXY) is displaying a subdued performance as the appeal for safe-haven has been trimmed. Due to a light US economic calendar, the focus will remain on commentaries from Fed policymakers and geopolitical tensions. The 10-year US Treasury yields are also oscillating below the critical hurdle of 4%. This week, Canada’s inflation data will be of utmost importance. The headline Canada Consumer Price Index (CPI) figure is expected to decline to 6.8% from the prior release of 7.0%. Also, the core CPI data may trim by 20 basis points (bps) to 5.6%. The Bank of Canada (BOC) is accelerating its interest rates vigorously and has reached 3.25% as price pressures are deteriorating the economic fundamentals for the longer term. The central bank is entirely focusing on bringing price stability and ignoring current economic prospects. On the oil front, oil prices have rebounded after printing a fresh two-week low at $84.72. Investors are discounting the bleak growth outlook amid escalating policy tightening measures by the central banks. Apart from that, the continuation of the no-tolerance approach towards Covid-19 by China has kept a lid on the oil demand. It is worth noting that Canada is a leading exporter of oil to the US and weak oil prices are weakening the Canadian dollar.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Fed's Hawkish Policy May Help Contain Deeper Losses On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 18.10.2022 09:27
USD/CAD drifts lower for the second straight day and is pressured by a combination of factors. An uptick in oil prices underpins the loonie and exerts pressure amid a modest USD weakness. Aggressive Fed rate hike bets, recession fears should limit the USD downside and cap the major. The USD/CAD pair adds to the previous day's heavy losses and remains under some selling pressure for the second successive day on Tuesday. The intraday downfall drags spot prices closer to mid-1.3600s, or a one-and-half-week and is sponsored by a combination of factors. The prevalent risk-on environment - as depicted by a strong follow-through rally in the equity markets - continues to weigh on the safe-haven US dollar. Apart from this, a modest recovery in crude oil prices, bolstered by a softer buck, underpins the commodity-linked loonie and contributes to the offered tone surrounding the USD/CAD pair. That said, the prospects for a more aggressive policy tightening by the Fed should act as a tailwind for the greenback and help limit deeper losses for the USD/CAD pair, at least for the time being. In fact, the markets seem convinced that the Fed will continue to hike interest rates at a faster pace to combat stubbornly high inflation. The fed funds futures indicate a nearly 100% chance of another supersized 75 bps rate increase at the next FOMC policy meeting in November. This remains supportive of elevated US Treasury bond yields and favours the USD bulls. Apart from this, growing recession fears should cap the latest optimism in the markets and benefit the safe-haven buck. Investors remain concerned about economic headwinds stemming from rising borrowing costs, China's zero-COVID policy and geopolitical risks. Furthermore, expectations that a deeper global economic downturn will dent fuel demand should cap the black liquid. This, in turn, supports prospects for the emergence of some dip-buying around the USD/CAD pair. Market participants now look to the US economic docket, featuring the release of Industrial Production data and Capacity Utilization Rate for some impetus later during the early North American session. Traders will further take cues from oil price dynamics for short-term opportunities, though the focus will remain on the Canadian CPI report on Wednesday.
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Stock Markets In Europe And The US Showed Marked Gains And Investors Have More Time To Recover

InstaForex Analysis InstaForex Analysis 18.10.2022 11:54
Stocks rose on Monday, primarily due to the start of the corporate reporting season. Clearly, investors are no longer focusing only on increasing interest rates, high inflation and deteriorating world economy, but also on the performance of companies. This inspires optimism in the market, which decreases negative sentiment and brings back demand for shares. Thus, the stock markets in Europe and the US showed a noticeable increase, while US treasury yields have stalled and are not going anywhere after their recent growth. For example, the yield of 10-year bonds hit 4% and so far could not consolidate above it. This, in turn, puts pressure on the dollar, prompting a rise in other currencies paired with it. Considering that there is a two-week time lag until the Fed's meeting in November, investors have more time to win back losses. This may start today, during the European session, and may extend amid positive dynamics of US stock indices. Of course, the dollar will be affected negatively, but there is still the need to buy it because there are too many factors that do not allow it to decline fully. Most likely, further aggressive rate hikes by the Fed and the presence of high demand will keep it afloat for a long time. Forecasts for today: AUD/USD The pair failed to overcome 0.6330, which reinforces the existing downward trend. If this continues, the quote will fall to 0.6220. USD/CAD The pair is testing the level of 1.3715. A rise above it could lead to a further increase to 1.3885.   Relevance up to 07:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324580
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The US Dollar To Canadian Dollar (USD/CAD) Pair Will Remain On The Bear's Radar

TeleTrade Comments TeleTrade Comments 19.10.2022 08:51
USD/CAD struggles to extend the recovery from two-week low, grinds near intraday top. US readiness to use SPR to battle OPEC+ supply cuts weighs on oil prices. Sluggish markets restrict immediate moves but firmer yields tease DXY buyers. With the BOC’s likely softer rate hike than the Fed’s the pair buyers remain hopeful. USD/CAD steadies near 1.3750 amid sluggish markets during Wednesday’s European morning. In doing so, the Loonie pair seesaws around intraday high while trying to stretch the previous day’s rebound. The quote’s resistance to decline could be linked to the latest retreat in oil prices, due to Canada’s reliance on WTI crude oil export, as the US eyes releasing more oil from its Strategic Petroleum Reserve (SPR) to battle the OPEC+ supply cut. WTI crude oil remains mildly bid at the fortnight low marked the previous day, retreating to around $83.70 at the latest. On the other hand, the US Dollar Index (DXY) picks up bids while tracking the recently firmer US Treasury yields. That said, the US 10-year Treasury yields added two basis points (bps) near 4.02% mark at the latest. The market’s inaction could be linked to the lack of major data/events, as well as mixed catalysts surrounding China and Russia. That said, the recently mixed covid numbers from China join Russia’s strong fight in Ukraine to challenge the sentiment. However, upbeat earnings and hopes of more stimulus from Beijing, Tokyo and the Eurozone keep the riskier assets firmer. On the same line could be the UK’s optimism due to the recent U-turn from the fiscal policies. Elsewhere, Fed bets and the comments suggesting heavy rate hikes from the US central bankers underpin the US Treasury yields and the DXY of late. Earlier in the day, Minneapolis Federal Reserve Bank President Neel Kashkari said, “Until I see some compelling evidence that core inflation has at least peaked, not ready to declare a pause in rate hikes.” With this, the CME’s FedWatch Tool signals that markets are pricing in a nearly 95% chance of the Fed’s 75 rate hike in November. It’s worth noting that the latest second-tier data from the US and Canada have been mixed but the Bank of Canada (BOC) and the Fed have both shown readiness to battle inflation and increase the benchmark rates. Even so, the hawkish pace at the Fed is much stronger than the BOC and hence the USD/CAD pair is likely to witness further upside if today’s Canadian Consumer Price Index (CPI) eases. Forecasts suggest the CPI ease to 6.8% from 7.0% prior while the closely watched BOC CPI could also decline to 5.8% YoY versus 5.6% previous readings. Technical analysis Given the bearish MACD signals and the confirmation of the five-week-old rising wedge formation on Monday, USD/CAD is likely to remain on the bear’s radar unless it successfully crosses the 1.3850 immediate hurdle comprising the wedge’s lower line.
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

Upcoming Data From Canada May Increase The USD/CAD Pair

InstaForex Analysis InstaForex Analysis 19.10.2022 14:39
Inflation in the world continues to rise, while the world's largest central banks continue to fight it. Central banks have chosen to raise interest rates as one of the main means of this struggle, and so far, judging by the continued growth of the curve reflecting inflation, this struggle does not bring tangible results. On Monday, Statistics New Zealand reported that consumer inflation increased by +2.2% in the 3rd quarter (with a forecast of +1.6% and against the previous value of +1.7%). The annual CPI came out with a value of +7.2% (with a forecast of +6.6% and against the previous value of +7.3%). We wrote about this in our previous review. Today, the Office for National Statistics published fresh data on consumer inflation in the UK. They were also underwhelming, posting a rise in September CPI from +9.9% to +10.1% YoY. The updated CPI for the Eurozone, which was also published today, also recorded an increase in inflation in the region in September at +9.9% YoY, although it turned out to be slightly weaker than the preliminary value of 10.0%. Today (at 12:30 GMT), inflation data in Canada will be presented by Statistics Canada together with the Bank of Canada. The publication of inflation data is very important for economists, market participants, and central bankers. Consumer prices account for the bulk of headline inflation and estimating the rate of inflation is important in setting the parameters for a central bank's current monetary policy. Given that the inflation target for the Bank of Canada is in the range of 1%–3%, the growth of the indicator (CPI and Core CPI) above this range is a harbinger of a rate increase and a positive (under normal economic conditions) factor for the CAD. Previous base CPI values (from the Bank of Canada): 5.8%, 6.1%, 6.2% (annualized). The indicator is expected to decrease to 5.6%. On the one hand, the decline in inflation in the face of its high level is a positive factor for the national economy. But on the other hand, it is still high, which continues to put pressure on the BoC to further increase the interest rate. In other words, it may be difficult to predict the market reaction to this publication. The Canadian dollar may both strengthen, especially if the CPI figures turn out to be higher than expected, and weaken, given the current drop in oil prices as well. By the way, today (at 14:30 GMT), the US Department of Energy will present its weekly report on oil reserves in the country's storage facilities. So, during this period of time, the USD/CAD pair may swing again. The next meeting of the Bank of Canada is scheduled for October 26. Assessing the reaction of the Canadian dollar to the results of the September meeting of the Bank of Canada (it first strengthened, and then continued to sharply weaken against the US dollar), it would probably be logical to assume further growth in the USD/CAD pair, also taking into account the fall in oil prices, stock indices and expectations of the development of the Fed's aggressive monetary policy. On Friday, Statistics Canada is to release its Retail Sales Index, which is a major measure of consumer spending. The index is considered an indicator of consumer confidence, also reflecting the state of the retail sector in the short term, and its possible fall (after falling by -2.5% in July) could provoke a weakening of the Canadian dollar and, accordingly, an increase in the USD/CAD pair, which has been in a steady upward trend since mid-August. As of writing, it is trading near the 1.3751 mark, through which there is an important short-term support level. Its breakdown and the breakdown of the local support level 1.3657 may provoke a deeper decline, but so far only as a correction. In general, the USD/CAD bullish trend prevails.   Relevance up to 12:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324743
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

USD/CAD Commented By Kenny Fisher (Oanda) - 19/10/22

Kenny Fisher Kenny Fisher 19.10.2022 23:52
USD/CAD pushed higher earlier in the day but has pared most of those gains. In the North American session, the Canadian dollar is trading at 1.3757, up o.17%. Canada’s CPI ticks lower Headline inflation ticked lower to 6.9% in September, down from 7.0% in August. Still, the reading was higher than the consensus of 6.8%. Core inflation remains even more stubborn, rising to 6.0%, up from 5.8% and above the forecast of 5.6%. The inflation report takes on added significance as the Bank of Canada meets next week, and as is the case with most major central banks, the question is not if rates will rise, but by how much. The Bank will be unhappy with core inflation rising, although I doubt this was much of a surprise for Bank policy makers, as most BoC core inflation indicators are around 6%. The takeaway from the inflation data is that there will be more support for a 75 basis point hike, as opposed to a 50bp move, with inflation remaining stubbornly high. With the Federal Reserve possibly looking at a 75bp rate hike in November, a matching hike from the BoC will prevent the US/Canada rate differential from widening, which is good news for the Canadian dollar. The BoC’s aggressive rate tightening has pushed the economy closer to a recession, but inflation remains public enemy number one for the Bank, which means more oversize rate hikes are on the way. In the US, the Fed’s rate tightening has led to the economy showing signs of cooling down, such as the housing market. The NAHB housing market index fell for a 10th straight month, dropping to 38 in October, down from 43 in September. USD/CAD Technical 1.3927 and 1.4024 are the next resistance lines There is support at 1.3744 and 1.3647 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar yawns after inflation report - MarketPulseMarketPulse
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Is Likely To Remain On The Bullish Mood

TeleTrade Comments TeleTrade Comments 20.10.2022 08:53
USD/CAD pares intraday gains inside a three-day-old triangle formation. RSI conditions, 50-HMA add to the downside filters. Bulls need a successful break of 1.3800 for conviction. USD/CAD grinds lower around 1.3770 during early Thursday morning in Europe, after a two-day uptrend, as traders await a clear break of immediate triangle support. In doing so, the Loonie pair portrays the market’s indecision. Other than the three-day-old symmetrical triangle’s support line, the firmer RSI (14) also keeps the USD/CAD buyers hopeful. Even if the quote drops below 1.3765 immediate support, it needs validation from the 50-HMA support of 1.3750 to convince the USD/CAD sellers. In that case, the pair could quickly drop to the weekly low near 1.3655 before declining toward the monthly low surrounding the 1.3500 round figure. Meanwhile, recovery moves need to cross the aforementioned triangle’s resistance line, around 1.3800 by the press time, to recall the USD/CAD buyers. Following that, 1.3900 and the monthly high near 1.3980 could entertain the bulls before flashing the 1.4000 mark on the chart. It’s worth noting that the USD/CAD pair’s successful run-up beyond 1.4000 won’t hesitate to aim for the May 2020 high near 1.4175. To sum up, USD/CAD is likely to remain on the bull’s radar despite the latest inaction. However, a downside break of 1.3750 might trigger a short-term correction. USD/CAD: Hourly chart Trend: Bullish
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Canadian Retail Sales and Future of Commodity Currencies

Jing Ren Jing Ren 20.10.2022 14:15
As fears of a recession start to settle in, commodity currencies have been on the backfoot despite offering comparably better real rates. Canada has been a particular example of this phenomenon, with its dollar weakening despite a more aggressive rate hiking path than the Fed. The most recent survey of businesses showed further deterioration in optimism, with the majority expecting and preparing for a recession in the coming quarters. Industrial production prices and in particular raw material prices have been declining, a sign that inflation might be on the way down. At least, some time in the future. The most recent CPI unexpected increased, and the annual rate was above expectations. Nevertheless, the consensus among economists is that the BOC will be looking to slow down its rate hikes. There is a generalized problem The shift in expectations from the BOC comes fast on the heels of a similar shift in another commodity Commonwealth country: Australia. The RBA's softening move at the last meeting caught investors by surprise, and they seem determined to not be surprised by the BOC this time. Investors are concerned about rising interest rates causing tightness in money markets, as market makers are unwilling to borrow in order to finance investments in falling stock markets. This is forcing central banks, particularly in commodity currencies, to reevaluate their stance on tightening. Prices are slipping Australia's exports have remained steady all year, but the price of commodities have been coming down. Canada is experiencing a similar situation, with the US buying as much crude as possible to make up for Russia being excluded from the market. But, despite OPEC+ cutting production targets a couple of weeks ago, crude prices have been falling. With less remittances to Canada to pay for exports, the Canadian dollar is less attractive when compared to its neighbor's currency. Add to that the possibility the BOC might be pulling back on the tightening, there is reason to expect that the loonie will be weaker going forward. Making things difficult The problem is that a weaker currency means that imported products become more expensive and increase inflationary pressures. This is particularly relevant for countries like Canada and Australia, because they don't have the economies of scale to domestically produce a significant amount of consumer goods. It's even more relevant for smaller countries, such as New Zealand. Higher inflation coupled with increased borrowing costs would be expected to undermine consumers, which would put the economy more at risk, further weakening the currency. Commodity currency traders, therefore, would do well to be particularly interested in retail sales figures from their respective countries. Canada reports September retail sales tomorrow which are expected to drop to 6.5% growth compared to 8.0% prior. Reminder, Canada's annualized inflation in that period was 6.9%.
The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

Price Of The Canadian Dollar To US Dollar Pair (CAD/USD) Can Make New Lows

TeleTrade Comments TeleTrade Comments 21.10.2022 08:29
The 20-EMA at around 1.3080 has acted as major support for the counter. The dismal market mood is supporting the greenback bulls. The asset may test October high at 1.3978 after overstepping the round-level hurdle of 1.3900. The USD/CAD pair is attempting to re-test the critical hurdle of 1.3811 as the risk-off market mood has strengthened further. S&P500 futures have escalated their losses in Tokyo after two consecutive bearish trading sessions, which indicates that the risk aversion theme will stay for a while. This has also infused fresh blood into the US dollar index (DXY), which has overstepped the round-level resistance of 113.00 in Asia. Also, the 10-year US treasury yields haven’t shown any sign of exhaustion despite a juggernaut rally to near 4.23%. On a daily scale, the asset has remained in the grip of bulls after breaching the upward-sloping trendline placed from May 12 high at 1.3077. The formation of buying tails after a correction to near the 20-period Exponential Moving Average (EMA) at around 1.3680 indicates that the corrective move is concluded now and the asset will resume its upside journey. Also, the upside trending 50-EMA at 1.3445 indicates that the upside bias is intact. The Relative Strength Index (RSI) (14) tested 40.00-60.00 after remaining in the bullish range of 60.00-80.00. A conclusion of the corrective move may drive the momentum oscillator again into the bullish range. Going forward, a break above Wednesday’s high at 1.3810 will send the asset toward the round-level cushion of 1.3900, followed by the previous week’s high at 1.3978. On the contrary, a decisive drop by the asset below the round-level support of 1.3700 will drag the asset toward October 6 low at 1.3565. A breakdown of the latter will bring further weakness in the asset towards October 5 low at 1.3504. USD/CAD daily chart                
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Inflation Report Is Important As The Bank Of Canada Will Meet Next Week

Kenny Fisher Kenny Fisher 21.10.2022 13:58
The Canadian dollar is in negative territory today, as the US dollar is higher against the major currencies. In the European session, USD/CAD is trading at 1.3827, up 0.45%. Canada retail sales expected to improve Canada releases retail sales for August later today. The July data was weak, with retail sales at -2.5% and core retail sales at -3.1%. The consensus for August stands at 0.4% for the headline reading and 0.2% for core retail sales. The July release was the first decline for both indicators in seven months, and another decline would raise concerns about the strength of consumer spending, a key driver of economic activity. Inflation remains high and is still the Bank of Canada’s number one priority. Headline inflation ticked lower to 6.9% in September, down from 7.0% in August. Still, the reading was higher than the consensus of 6.8%. Core inflation remains even more stubborn and rose unexpectedly to 6.0%, up from 5.8% and above the forecast of 5.6%. The inflation report takes on added significance as the Bank of Canada meets next week. Policy makers are virtually certain to raise rates, but by how much? The rise in core inflation was not a surprise for the central bank, as most BoC core inflation indicators are around 6% and have not shown any signs of peaking. The takeaway from this week’s inflation data bolsters the case for a 75 basis point hike, with inflation remaining stubbornly high. The Fed has given no signals that it plans to ease up on rate hikes anytime soon, and this hawkish stance was reaffirmed by Philadelphia Federal Reserve President Patrick Harker on Thursday. Harker said that higher interest rates had failed to curb inflation, and the Fed would have to continue raising rates, which he said will be “well above” 4% by the end of the year. Currently, the benchmark is at 3.25%, with the Fed holding its next meeting on November 2nd. . USD/CAD Technical 1.3854 and 1.4005 are the next resistance lines There is support at 1.3731 and 1.3580 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

InstaForex Analysis InstaForex Analysis 23.10.2022 20:13
Macro data published last week showed that inflation in the world, including in its most economically developed regions, continues to grow. Thus, according to the data presented, annual consumer inflation in the UK has reached a new multi-year high of 10.1%, in the eurozone - 9.9%, in Canada - 6.9%. The CPI consumer price index for the United States, published a week earlier, also indicated a high inflation rate of 8.2% (in annual terms). Meanwhile, high geopolitical tensions remain in the world, the western political world is being shaken by intra-party conflicts, while elections of a new prime minister are expected in the UK next week. Among the features of trading in the foreign exchange market, I would like to note that the USD/JPY pair took the level of 150.00, which, as market participants believed, the Bank of Japan would protect. However, so far this is not happening – USD/JPY is moving higher to the upside, and the yen continues to weaken rapidly. Next week, meetings of the three largest world central banks will take place at once - Canada, the eurozone, Japan, and entire blocks of the most important European macro statistics, as well as on China and the USA, will be published. Market participants will also pay attention to the release of important macro statistics for Australia, Germany, and the UK. Thus, the next week promises to be extremely volatile, with a lot of trading opportunities. As for the dollar, its DXY index maintains positive dynamics and continues to remain in the zone of 20-year highs, not far from the local high of 114.74 reached last month. Surpassing this resistance level will open the way for DXY towards 120.121.00, the 2001 highs. Monday 24 October Germany. Index (PMI) of Business Activity in the Manufacturing Sector (preliminary release) This S&P Global report is an analysis of a survey of 800 purchasing managers, during which respondents are asked to assess the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventories. Since purchasing managers have, perhaps, the most up-to-date information about the situation in the company, this is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Germany's GDP. A result above 50 is seen as positive and strengthens the EUR, below 50 as negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 47.8, 49.1, 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8, 58.4, 62.6. Forecast for October: 48.0. The level of influence on the markets (pre-release) is high. Eurozone. Composite Index (PMI) of Business Activity in the Manufacturing Sector (preliminary release) The PMI Business Activity index in the eurozone manufacturing sector (from S&P Global) is an important indicator of the state of the entire European economy. A result above 50 is seen as positive and strengthens the EUR, below 50 as negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 48.1, 48.9, 49.8, 52.1, 54.6, 56.5, 58.2. Forecast for October: 48.1. The level of influence on the markets (pre-release) is high. Great Britain. Index (PMI) of Business Activity in the Manufacturing Sector and in the Service Sector (preliminary release) The PMI business Activity index in the UK manufacturing sector (from S&P Global) is an important indicator of the state of the British economy. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to decline sharply in the short term. The data is better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is seen as positive and strengthens GBP, below 50 as negative for GBP. Previous values: 48.4, 47.3, 52.1, 52.8, 54.6, 55.8, 55.2, 58.0, 57.3. The level of influence on the markets (pre-release) is high. The PMI Business Activity Index in the UK services sector (S&P Global) is an important indicator of the state of the British economy. The service sector employs most of the working-age population of the UK, and it accounts for about 75% of GDP. The most important part of the service sector is still financial services. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to decline sharply in the short term. The data is better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is seen as positive and strengthens GBP, below 50 as negative for GBP. Previous values: 50.0, 50.9, 52.6, 54.3, 53.4, 58.9, 62.6, 60.5, 54.1 ( in January 2022). Forecast for October: 49.6. The level of influence on the markets (pre-release) is high. USA. Business Activity Indices (PMI): Composite, in the Manufacturing Sector and in the Service Sector of the Economy (from S&P Global) for October The monthly S&P Global report will release (among other data) a composite PMI index and PMI indices in the manufacturing sector and in the services sector of the US economy, which are an important indicator of the state of these sectors and the US economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term. Previous values of the PMI indicator: composite 49.5, 44.6, 47.7, 52.3, 53.6, 56.0; in the manufacturing sector 52.0, 51.5, 52.2, 57.0, 59.2; in the service sector 49.3, 43.7, 47.3, 52.7, 53.4, 55.6. The level of market impact is high, although lower than the similar report from the ISM (American Institute of Supply Management) Tuesday 25 October USA. Consumer Confidence Index Report by the Conference Board with the results of a survey of about 3,000 American households, during which respondents are asked to assess the level of current, future economic conditions and the overall economic situation in the United States. The confidence of American consumers in the economic development of the country and in the stability of their economic situation is a leading indicator of consumer spending, which accounts for a large part of overall economic activity. A high level of consumer confidence indicates growth in the economy, while a low level indicates stagnation. The previous value of the indicator is 108.0. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar. The level of influence on the markets is medium to high. Wednesday 26 October Australia. Consumer Price Index (for the 3rd quarter). Reserve Bank of Australia Core Inflation Index using the truncated average method (for the 3rd quarter) The Consumer Price Index (CPI) determines the change in prices in a certain basket of goods and services for a given period, being a key indicator for assessing inflation and changes in consumer preferences. The assessment of the inflation rate is important for the management of the central bank when determining the parameters of the current monetary policy. The indicator below the forecast/previous value may provoke a weakening of the AUD, since low inflation will force the RBA leaders to adhere to a soft monetary policy course. Conversely, the growth of inflation and its high level will put pressure on the RBA to tighten its monetary policy, which in normal economic conditions is assessed as a positive factor for the national currency. Previous values of the indicator: +1.8% (+6.1% in annual terms) in the 2nd quarter of 2022, +2.1% (+5.1% in annual terms) in the 1st quarter of 2022, +1.3% (+3.5% in annual terms) in the 4th quarter, +0.8% (+3.0% YoY) in the 3rd quarter, +0.8% (+3.8% YoY) in the 2nd quarter, +0.6% (+1.1% YoY) in the 1st quarter of 2021. Forecast for the 3rd quarter of 2022: +1.5% (+6.9% in annual terms). The level of influence on the markets is high. The RBA Core Inflation Index, measured by the truncated average method (for the 3rd quarter) Published by the RBA and the Australian Bureau of Statistics. It reflects the dynamics of retail prices of goods and services included in the consumer basket. The simple truncated average method takes into account the weighted average core, the central 70% of the index components. Previous index values: +1.5% (+4.9% YoY) in the 2nd quarter of 2022, +1.4% (+3.7% YoY) in the 1st quarter of 2022, +1.0% (+2.6% YoY) in the 4th quarter, +0.7% (+2.1% YoY) in the 3rd quarter, +0.5% (+1.6% YoY) in the 2nd quarter, +0.3% (+1.1% YoY) in the 1st quarter of 2021. Forecast for the 3rd quarter of 2022: +2.0% (+5.5% in annual terms). The level of influence on the markets is high. China. GDP (quarterly). Retail Sales China's National Bureau of Statistics is to release its quarterly GDP report, which is the broadest measure of economic activity and a major indicator of the health of the economy. High GDP figures will have a positive impact on the Chinese yuan quotes, and, conversely, a weak GDP report will have a negative impact on the CNY. The dynamics of China's GDP is reflected not only in the dynamics of the Chinese yuan, but also in the dynamics of the world, primarily Asian stock indices, as well as on quotes of commodity currencies such as the New Zealand and Australian dollars. China is the largest trade and economic partner of Australia and New Zealand and the buyer of raw materials from these countries. Therefore, positive macro statistics from China may also have a positive impact on the quotes of these commodity currencies, although recent data from China indicate a slowdown in the world's largest economy, and this is a negative factor for stock markets and commodity currency quotes. Previous Chinese GDP: -2.6% (+0.4% YoY) in Q2, +1.3% (+4.8% YoY) in Q1 2022, + 1.6% (+4.0% YoY) in Q4, +0.2% (+4.9% YoY) in Q3, +1.3% (+7, 9% YoY) in Q2, +0.6% (+18.3% YoY) in Q1 2021. The level of influence on the markets is medium to high. The Retail Sales Level Index is released monthly by China's National Bureau of Statistics and evaluates the total volume of retail sales and cash generated. It is the main indicator of consumer spending, which accounts for the majority of overall economic activity. It is also considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. The growth of the index is usually a positive factor for the CNY; a decrease in the indicator will negatively affect the CNY. Previous index values (in annual terms) +5.4%, -6.7%, -11.1, -3.5, +6.7 (in February 2022) after +8% growth in the last months of 2019 year and falling by -20.5% in February 2020). The data speaks of the uneven recovery of this sector of the Chinese economy after a strong fall in February-March 2020. If the data turns out to be weaker than the forecast and/or previous values, then the CNY may weaken sharply. The level of influence on the markets is medium to high. Canada. Bank of Canada interest rate decision. Bank of Canada accompanying statement The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future. Inflation in the country accelerated to almost a 40-year high (in February 2022, consumer prices in Canada rose at an annualized rate of 5.7% after rising by 5.1% in January, reaching a 30-year high, and in May - already to 7.7%). This is the highest figure since March 1983! The Bank of Canada estimates that the neutral level of the interest rate, at which it does not stimulate or slow down economic activity, is 2.5%. The current level of the interest rate is 3.25%. The Bank of Canada is widely expected to raise interest rates again at this meeting (by 0.50% or even 0.75%). In an accompanying statement, Bank of Canada officials will explain the decision and possibly share plans for the monetary policy outlook. The tough tone of this statement will cause the Canadian dollar to strengthen. The propensity of the bank's leaders to carry out a soft policy may provoke a weakening of the Canadian dollar. The level of influence on the markets is high. Canada. Bank of Canada Press Conference The press conference consists of two parts - first the prepared statement is read out, then the conference is open for press questions. This is one of the main methods that the Bank of Canada uses to communicate with market participants on monetary policy issues, also giving hints about future monetary policy. It examines in detail the factors that influenced the decision of the bank's management on the interest rate. During the press conference, Bank of Canada Governor Tiff Macklem will explain the bank's position and assess the current economic situation in the country. If the tone of his speech is tough on the monetary policy of the Bank of Canada, then the Canadian dollar will strengthen in the foreign exchange market. If Macklem speaks in favor of a soft monetary policy, the Canadian currency will decline. In any case, high volatility in CAD quotes is expected during his speech. The level of influence on the markets is high.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Future Of The USD/CAD Exchange Rate Will Depend On The Decision Of Bank Of Canada (BOC)

TeleTrade Comments TeleTrade Comments 24.10.2022 08:40
USD/CAD has accelerated to near 1.3680 amid a stellar recovery in the DXY. The 10-year US Treasury yields have extended their losses to near 4.17% amid soaring market mood. The BOC may trim the extent of the rate hike to 50 bps this week. The USD/CAD pair sensed buying interest after dropping to near the round-level support of 1.3600 in early Tokyo. The loonie bulls have retreated after the US dollar index (DXY) defended the intervention rumors of the Bank of Japan (BOJ) recovered its entire intraday losses. The asset has extended its gains to near 1.3680. The DXY has recaptured its intraday high at 112.26 and is expected to behave critically ahead as the returns on US government bonds have dropped sharply. The 10-year US Treasury yields have extended their losses by 4.17% after displaying jaw-dropping gains to near 4.34% on Friday. Market sentiment is extremely cheerful and S&P500 futures are holding their gains. On Monday, the US S&P PMI data will be keenly watched. The Manufacturing PMI is expected to decline to 51.2 vs. the prior release of 52.0 while the Services PMI may drop to 49.2 from 49.3 reported earlier. This week, the interest rate decision from the Bank of Canada (BOC) will determine the further direction of the asset. A Reuters poll on projections for BOC’s interest rate claims that BOC Governor Tiff Macklem will announce a rate hike of 50 basis points (bps). The extent of the rate hike seems lower than their current pace of hiking interest rates. It is worth noting that the headline inflation rate in Canada was recorded at 6.9% for September. On the oil front, oil prices have dropped below the crucial support of $85.00 amid mounting global recession fears. In addition to the BOC, the BOJ and the European Central Bank (ECB) will announce their monetary policies. The BOJ may continue its ultra-loose stance while the ECB could tighten its monetary policy. An expectation of a fresh rate hike spell is weighing pressure on oil prices.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Today: Major Currencies Stay Relatively Quiet (EUR/USD, USD/JPY, GBP/USD)

TeleTrade Comments TeleTrade Comments 24.10.2022 11:00
Here is what you need to know on Monday, October 24: As investors prepare for the highly-anticipated central bank decisions later this week, major currencies stay relatively quiet at the start of the new week except for the Japanese yen. The US Dollar Index moves sideways at around 112.00 and US stock index futures trade flat on the day. S&P Global will release the preliminary October Manufacturing and Services PMI data for Germany, the euro area, the UK and the US. Federal Reserve Bank of Chicago's National Activity Index will also be looked upon for fresh impetus later in the day. During the Asian trading hours, the data from China revealed that the Gross Domestic Product grew at an annualized rate of 3.9% in the third quarter. This reading came in better than the market expectation for an expansion of 3.4%. Retail Sales in China, however, rose by 2.5% on a yearly basis, falling short of analysts' estimate of 3.3%. The Shanghai Composite fell sharply following mixed data and was last seen losing more than 2% on a daily basis. USD/JPY The USD/JPY pair climbed toward 150.00 in the first hours of trading early Monday but lost over 400 pips in a matter of 10 minutes. Japan’s top currency diplomat Masato Kanda refrained from clarifying whether they intervened in the market but reiterated that they will continue to take appropriate action against excessive, disorderly market moves. Following the sharp decline witnessed in the Asian session, the pair recovered to the 149.00 area, where it's up around 1% on the day. EUR/USD EUR/USD trades in a relatively tight range near mid-0.9800s following Friday's rebound. Business activity in the euro area's and Germany's manufacturing sectors are expected to continue to contract in early October.  GBP/USD GBP/USD trades in positive territory and continues to edge higher toward 1.1400 in the early European morning on Monday. Former British Prime Minister Boris Johnson announced that he ended his big to replace Liz Truss. Meanwhile, former chancellor Rishi Sunak has reportedly 165 supporters ahead of Monday's nomination deadline and remains the clear favourite to become the next PM. Gold Following Friday's impressive upsurge, gold climbed to a fresh 10-day high near $1,670 early Monday but struggled to preserve its bullish momentum. At the time of press, XAU/USD was little changed on the day at $1,657. Meanwhile, the 10-year US Treasury bond yield is down nearly 2% on the day, helping gold hold its ground for the time being. BTC Bitcoin climbed toward $20,000 on Sunday but lost its traction before reaching that level. As of writing, BTC/USD was down 1% on the day at $19,350. Ethereum ended up gaining more than 4% last week and seems to have gone into a consolidation phase above $1,300 early Monday.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Bank of Canada is expected to rise the rate by 75bp. Inflation is still there

Kenny Fisher Kenny Fisher 24.10.2022 20:10
The Canadian dollar has started the week with losses. In the North American session, USD/CAD is trading at 1.3721, up 0.57%. The week ended on a high note, as Canadian retail sales for August were stronger than expected. Retail sales posted a modest 0.7% gain, rebounding from -2.2% in July and beating the consensus of 0.2%. Core retail sales also rose 0.7% after a -2.2% reading in August and above the forecast of 0.4%. The turnaround boosted the Canadian dollar by close to 1%. Consumer spending has stabilized, which has bolstered the case for the Bank of Canada raising rates by 75 basis points. As well, the BoC would like to keep pace with the Fed, which is expected to raise rates by 75 bp,  so as to prevent the Canadian dollar from falling further against the US dollar. The markets have priced in a 75bp move by the BoC at around 80%, which would bring the cash rate to an even 4.0%. Markets expect 0.75% hike from BoC The Bank of Canada has been aggressive in its rate-tightening cycle, with the reduction in inflation its number one priority. Still, there are no clear signs that inflation has peaked. Headline inflation ticked lower to 6.9% in September, down from 7.0% in August. Still, the reading was higher than the consensus of 6.8%. Core inflation remains even more stubborn and rose unexpectedly to 6.0%, up from 5.8% and above the forecast of 5.6%. The Fed has given no signals that it plans to ease up on rate hikes anytime soon, and this hawkish stance was reaffirmed by Philadelphia Federal Reserve President Patrick Harker on Thursday. Harker said that higher interest rates had failed to curb inflation, and the Fed would have to continue raising rates, which he said will be “well above” 4% by the end of the year. There is a 95% that the Fed will raise rates by 75bp according to the CME’s FedWatch, which would bring the benchmark rate to 4.0%. USD/CAD Technical 1.3854 and 1.4005 are the next resistance lines There is support at 1.3731 and 1.3580 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar starts week with losses - MarketPulseMarketPulse
bybit-news1

Bank of Canada may raise the interest rate by 75bp. Soon US Dollar will be most probably helped by the same move of Fed

Kenny Fisher Kenny Fisher 25.10.2022 19:57
The Canadian dollar is showing some strength in today’s North American session. USD/CAD is trading at 1.3649, down 0.41%. Bank of Canada expected to hike rates by 0.75% This week’s calendar is unusually light, with only two events out of Canada. Both releases, however, could have a significant effect on the movement of the Canadian dollar. The Bank of Canada will make its rate announcement on Wednesday, with the August GDP release on Friday. What can we expect from the BoC? The Bank has not been shy about raising rates, having hiked some 325 points this year. Similar to the case in the United States, inflation has proven to be stickier than anticipated, as the sharp rate-hike cycle is yet to cause a peak in inflation. In September, headline inflation ticked lower to 6.9%, down from 7.0% in August. Still, the reading was higher than the consensus of 6.8%. Core inflation remains even more stubborn and rose unexpectedly to 6.0%, up from 5.8% and above the forecast of 5.6%. Until a couple of weeks ago, the markets had been expecting the BoC to deliver a 0.50% hike at tomorrow’s meeting, but the September inflation data has raised the likelihood that policy makers will come out with guns blazing and increase rates by 0.75%. This would bring the cash rate to an even 4.0% and would be the highest rate level in the G-7. The steep rise in rates may not have curbed inflation, but it has caused significant economic pain to households and businesses and raises the likelihood of a recession. The BoC would love to ease up on oversize rate hikes but has made clear that inflation is public enemy number one and until inflation shows signs of peaking, it will continue to raise rates. A 0.75% hike will help the Canadian dollar keep pace with its US cousin, as the Federal Reserve is almost certain to deliver a 0.75% hike next week. USD/CAD Technical USD/CAD is testing support at 1.3656. Below, there is support at 1.3467 1.3718 and 1.3807 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar rises, markets eye BoC - MarketPulseMarketPulse
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

BOC, BOJ Rate Decisions This Week

Jing Ren Jing Ren 25.10.2022 18:03
The consensus among analysts is that the BOC will raise rates another 75bps, leaving the target rate at 4.0%. Lately, Canada has been "leading" the Fed since its meetings are scheduled before its southern neighbor's. Since both countries are facing similar situations, what the BOC does is often interpreted as a little foreshadowing of what to expect out of the Fed. Therefore, if the BOC doesn't deliver on expectations, it could shake confidence in the consensus that the Fed will also raise rates by 75bps. Canadian economic data has been doing relatively well over the last couple of weeks, which is seen supporting a strong move by the BOC. But there just recently was a fly in the ointment: US flash manufacturing PMIs fell into technical contraction this month. Canada doesn't have a comparable flash reading, meaning that the situation there could be similar, but it just isn't known. Canada first to pivot? Another difference is that Canada has had core inflation slowly falling unlike the US, but still above expectations. That has raised expectations that even though the BOC is expected to hike, it will do so "dovishly". That is, after the rate hike, Governor Macklem will tone down expectations of further aggressive hikes during his post-rate decision. The BOC releases the monetary policy report (MPR) at the same time as the rate decision, and that's likely to be poured over to find any clues about when the "pivot" will happen. If the bank lowers its economic projections, then that is likely to be taken as a sign that the next rate hike won't be as aggressive. Or that the BOC might even pause in December. How long can the BOJ stay put? Despite all that's been happening with the yen lately, the BOJ is expected to keep monetary policy unchanged when it meets later in the week. Inflation has been rising in Japan, but not enough to shake the banks' extreme easing position. But that doesn't mean that Kuroda couldn't influence the market in his extensive press conference following the meeting. As the yen has weakened over the last several months, calls have risen for the BOJ to do something. There have been at least two interventions so far to stop the slide in the currency. Although it's the BOJ who does the intervention, it's at the direction of the Ministry of Finance, which has allowed the central bank to remain aloof from the currency situation. What can be done The BOJ is currently applying a series of easing tools, from negative rates, to yield curve control to buying bonds. Although it could reverse course on any of those, should the BOJ decide to take measures, it most likely would come with first removing yield curve controls, since they are the least orthodox policy and would likely be interpreted as the least change in policy. However, it's not likely that will be decided at this meeting. But it could be something that Kuroda hints at during the press conference that could finally move the yen in a more permanent direction. Otherwise, smaller interventions might be the course, which would only increase speculation of coordinated action in the future.
Positive Shift in Inflation Structure: Core Inflation Falls in Hungary

Australia's Inflation Has Increased | The Interest Rates Decisions Ahead (Canada, Brazil)

Kamila Szypuła Kamila Szypuła 26.10.2022 09:54
The first reports came from the Pacific at the start of the day. This is an instant report on inflation in Australia. In the second half of the day I am waiting for important decisions from both Americas. Australian CPI At the beginning of the day, we get to know the report on the change in the price of goods and services from the perspective of the consumer in AUstralia. Both the annual and quarterly CPI results are positive. The price change from the third quarter of this year to the third quarter of last year increased by 1.2%. It was expected to rise to 7.0%, but the result turned out to be higher (7.3%). Looking at the previous periods, we can conclude that CPI YoY is in an exemplary trend. Source: investing.com CPI QoQ maintained its previous level of 1.8% and was higher than the forecasted 1.6%, therefore this reading was considered positive. BoC Interest Rate Decision Today the Bank of Canada will decide on interest rates. It is expected that this time there will be a hike of 75bp. Before the pandemic, interest rates were at 1.75%. Along with the increase in the risk of the crash, the rates dropped to the level of 0.25% and this level was maintained until March this year, when the first increase by 0.25% took place. Subsequent decisions on rate hikes confirmed the current level of 3.25%. To better understand the decisions of the Bank of Canada, traders will observe the press conference, which will take place one hour after the announcement of the new rate level. Crude Oil Inventories The weekly report on The Energy Information Administration's (EIA) Crude Oil Inventories will be released today. The reading is expected to be added and the number of barrels of oil held by the US Firms is expected to hit 1.029M. Such a result will mean an increase from the last level of -1.725M. If the increase in crude inventories is more than expected, it implies weaker demand and is bearish for crude prices. New Home Sales (Sep) According to forecasts, the annualized number of new single-family homes that were sold during the previous month will drop from 685K to 585K. Which may mean that the August peak turned out to be a false reflection of the downtrend. Since the beginning of the year, sales of family houses have been in a downward trend, despite several false rebounds from this trend. We can expect this trend to continue as long as interest rates continue to rise and the Fed does not ease its actions. Source: investing.com Brazil Interest Rate Decision Today, the largest country in South America will also decide on interest rates. The level is expected to be maintained. The last three decisions remained unchanged at 13.75% and a fourth such decision is expected. As of August 2020, interest rates in Brazil were at 2.0%. There have been increases in rates since March 2021. In February this year, they exceeded the level of 10.75%. They grew until they hit 13.75% in August. Summary: 2:30 CET Australian CPI (YoY) 2:30 CET Australian CPI (QoQ) 16:00 CET BoC Interest Rate Decision 16:00 CET New Home Sales (Sep) 16:30 CET Crude Oil Inventories 17:00 CET BOC Press Conference 23:00 CET Brazil Interest Rate Decision Source: https://www.investing.com/economic-calendar/
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

US dollar putting its foot off the gas for a while can be considered as correction. Canadian dollar may be helped by a 75bp rate hike today

ING Economics ING Economics 26.10.2022 10:51
The dollar is a little softer across the board as risk assets meet some bargain hunting. We are not looking for a significant top in the dollar yet, but for those that think the days of dollar strength are numbered, the Canadian dollar would make a good vehicle to express that view. The Bank of Canada should hike rates to 4% today, which should certainly help The Bank of Canada in Ottawa USD: Corrective forces at work The dollar has softened a little this week. The move looks less like any kind of de-rating of the US economy or the Fed cycle and more an issue of investors looking for bargains in bombed-out bond and equity markets. The MSCI world equity index is now nearly 10% off its lows – a move that has been helped by some stability in Europe (the end of Trussonomics) and probably the very high cash and underweight equity positions held by the investor community. It does feel like it is too early to declare the 'all-clear' for equity markets – e.g. the Fed could well push US real rates deeper into restrictive territory – meaning that we are treating this dollar decline as corrective. After yesterday's soft US October consumer confidence data and softer house prices, the focus today is on new home sales, which may fall 15% month-on-month. It should be clear by now that the housing sector is firmly in the firing line of the Fed's restrictive policy, but it will be important to see other sectors of the US economy slowing for the Fed to conclude that aggregate demand is soft enough to offset supply constraints.  110 is a big psychological level for DXY and we would assume that it would hold ahead of another 75bp hike from the Fed next week. Chris Turner EUR: Closing in on some big levels It has been several weeks in the making, but it does now seem that EUR/USD is responding to the lower natural gas prices and the improvement in the terms of trade position. We should be a little careful here since EUR/USD is now threatening to break out of a bearish channel that has contained price action all year. That means a break of 1.00 could trigger quite a sharp short squeeze to 1.02 and at the very least slow the rate (5% per quarter) of this year's EUR/USD decline. It is probably a question then of whether the 1.00 level can hold EUR/USD up to and including tomorrow's ECB meeting, before next week's Fed meeting could provide some more support to the dollar. Chris Turner Today's Central and Eastern Europe (CEE) calendar is basically empty, but we will be monitoring the aftermath of yesterday's meeting of the National Bank of Hungary, which, as expected, produced no change in interest rates. However, the central bank made it clear that it is ready to act again if the situation calls for it. In the meantime, it will continue to withdraw liquidity from the market using the measures previously introduced to keep the forint under control. However, as we mentioned earlier, further upward jumps in EUR/HUF under global development pressure cannot be ruled out at this point, and therefore further monetary tightening by the NBH cannot be ruled out either. But for the time being, the forint and the whole CEE region should enjoy favourable conditions in the form of a further decline in gas prices and a return of EUR/USD to parity. On the other hand, the ECB meeting will come into play tomorrow, which may shuffle the cards in the whole region again.  Frantisek Taborsky  GBP: Was that the bounce? UK asset markets and the pound took another leg higher yesterday as new PM Rishi Sunak took charge. It is a familiar-looking cabinet with Jeremy Hunt welcomed by the markets as Chancellor. The UK's sovereign credit default swap has now recovered to pre 'fiscal event' levels, while gilt-bund spreads are now back near the 150bp levels seen in early September. The question is therefore whether sterling needs to rally much further. 1.1500 is clearly a big level in GBP/USD (as is 1.00 in EUR/USD). A break could see the correction extend to 1.1750. But such a correction would more likely be driven by a global re-assessment of risk ($ negative) than a further re-rating of UK prospects. The UK data calendar is light today, with some focus on whether the 31 October medium-term fiscal plan will be delayed a few days. 0.8650-08750 looks to be the EUR/GBP near-term trading range. Chris Turner CAD: Canadian dollar deposits soon to start paying 4% The Bank of Canada (BoC) meets to set policy rates today. As my colleagues James Knightley and Francesco Pesole discuss in their preview, the BoC is expected to deliver a hawkish hike in the policy rate to 4.00% today. James thinks the BoC could hike a further 75bp in the cycle compared to the further 44bp currently priced into the Canadian OIS curve.  The Canadian dollar has been the best-performing G10 currency against the dollar this year, but is still down 7%. As above, if and when the dollar turns, the Canadian dollar should be at the forefront of the move. The problem has been, however, that the Canadian dollar has the highest correlation of the G10 currencies with world equity markets – in a bear market for equities. In the Canadian dollar's favour, however, will now be 4% deposit rates. Interestingly an IMF paper released earlier this year on the 'Stealth erosion of dollar dominance' concluded that three-quarters of central bank FX reserve diversification away from the dollar over the last 20 years had gone into nontraditional reserve currencies such as the Canadian dollar. Presumably, interest in the 4%-yielding AAA Canadian dollar securities will only build from the reserve management community. It helps as well that as an energy exporter, Canada has been on the right side of this year's terms of trade shock. Certainly, we look for a move back to and probably below 1.30 in USD/CAD next year. Timing is everything, of course. If equity markets can remain stable today, the hawkish BoC event risk could push USD/CAD down to 1.3500 on the day. But a sustained move below there requires a turn in the big dollar trend, which may not be a story until 2Q23. Chris Turner Read this article on THINK TagsFX Dollar Bank of Canada Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Google and Microsoft Fell, Expectations For Meta Are Low | The Bank Of Canada Will Deliver A Jumbo Rate Hike

Swissquote Bank Swissquote Bank 26.10.2022 11:11
US indices rallied yesterday on the back of soft economic data from the US, but the sentiment reversed after the Q3 results from Google and Microsoft didn't please. Both stocks fell in the afterhours trading. Rest of the earnings were mixed. Meta is the next US giant to announce earnings, and expectations are rather… low. US Yields The US 2-year yield has been easing after hitting a fresh 15-year high last week, as the US 10-year yield fell to 4.05%. The dollar index tanked around 1%, both the EURUSD and Cable advanced past their 50-DMA, which were acting as strong resistance since the start of the year, especially since the start of the war in Ukraine. Bank of Canada The USDCAD fell to a 3-week low, as the Bank of Canada (BoC) prepares to deliver another jumbo rate hike today. The BoC could deliver a 75bp hike, which would further fuel the odds of recession in Canada by next year. FX Market It’s important to note that the common denominator of the latest FX moves is the softer US dollar. And the downside moves in dollar and the US yields depend on Fed expectations – whatever the other central banks do seem accessory to the main dollar story. Fed The Fed expectations have been shaped by softish data, and some softish comments from the Fed officials recently. But there is nothing official pointing at a potential softening tone from the Fed just yet. Hence, the recent fall in the US dollar, and rebound in equities may not last. Gains remain vulnerable. And very much so, as the latest results from the US tech giants failed to make the investors smile yesterday. Watch the full episode to find out more! 0:00 Intro 0:35 Soft US data fueled optimism… 3:15 … but Big Tech earnings hurt. GOOG & MSFT fell 6.5% post-market 5:01 Other companies announced mixed results 6:30…as UPS surprised 7:00 Some come back to stocks, but stock/ bond correlation remains high 7:52 Meta earnings preview: expect nothing crazy… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Meta #Google #Microsoft #UPS #Spotify #GM #Visa #UBS #CocaCola #earnings #USD #EUR #GBP #CAD #BoC #rate #decision #US #home #prices #Fed #expectations #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH  
Analysis Of The CAD/JPY Commodity Currency Pair - 06.02.2023

The USD/CAD And The USD/JPY Exchange Rates Depend On The Actions Of Central Banks (BoC, BoJ)

InstaForex Analysis InstaForex Analysis 26.10.2022 11:27
A week of silence before the Fed meeting on November 2 helped reduce volatility in markets. Then, weaker macroeconomic data from the US strengthened confidence that the Fed will slow the pace of growth of interest rates. This is also why stocks continued to rally despite weak data and some deterioration in corporate earnings. Pound also rose after Rishi Sunak became the new prime minister of the UK. However, quotes are likely to move sideways starting today. USD/CAD Inflation in Canada turned out to be higher than expected in September even though it fell from 7% to 6.9% (6.8% was expected). Meanwhile, the core index rose to 6%, instead of falling from 5.8% to 5.6% as predicted. Clearly, price pressure continues to spread, capturing wider sectors of the economy. Although gas prices fell by 7.4%, rising prices in the service sector more than offset the decline. A week ago, markets expected the Fed rate to increase by 50 basis points. But now they are counting on a 75 basis point hike, and some even anticipate as much as 100 points, which, of course, is unlikely, but clearly indicates a slight panic in the markets. If the Fed press conference today is hawkish, and the November meeting hint at a potential 50bp rate hike in December, the situation will shift in favor of the loonie, which will eventually lead to a reversal of USD/CAD. Although it is too early to talk about this, the Bank of Canada will most likely act more cautiously. So far, according to the latest CFTC report, the net short position in CAD decreased by 363 million to -1.5 billion. But positioning remains bearish despite the slight adjustment. The estimated price is above the long-term average and is directed upwards, which gives reason to expect USD/CAD to continue growing. If the BoC shows firmness today, the pair is likely to fall towards the support level of 1.3510/20. But more realistic is the resumption of purchases, followed by a transition to a sideways range in anticipation of the Fed meeting on November 2. USD/JPY Yen broke the psychological level of 150 and flew to a new multi-year record, which led to an emergency intervention by the Bank of Japan. This caused USD/JPY to drop to a low of 146.23, the same magnitude as during the last intervention on September (£145.90 to £140.26). The exact amount of the intervention will be known after the Ministry of Finance publishes its report on October 31, but it is clear that it was no less than that of the previous intervention. There was another intervention on Monday, but it did not lead to the expected result. It seems that Japan is losing capital, and its foreign investment income is not enough to cover the deficit. Most likely, this will continue as long as the Bank of Japan carries on its ultra-soft policy. According to the latest CFTC report, the net short position in JPY rose by 1.267 billion to -7.9 billion. The positioning is steadily bearish, and there are no signs of a reversal. USD/JPY will continue to rise until the Bank of Japan changes its monetary policy. Perhaps, the meeting on Friday will give some news, but interventions will not be able to block growth.   Relevance up to 07:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325331
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

Expected 75bp Bank of Canada rate hike will remind us of 2008

Kenny Fisher Kenny Fisher 26.10.2022 13:22
The Canadian dollar has extended its gains today, as the US dollar has retreated against all the major currencies. In the European session, USD/CAD is trading at 1.3547, down 0.44%. Earlier, USD/CAD dropped as low as 1.3512, its lowest level in three weeks. Read next: NASDAQ Futures Down More Than 1.5%, Xi Jinping Pushes Out Youth League Members From Politburo, Spotify Users Up 20% YoY| FXMAG.COM Bank of Canada likely to remain hawkish All eyes are on the Bank of Canada, which will meet later today. The markets have priced in a 75 basis point hike, which would be a repeat of the September rate increase. The Bank has embarked on a steep rate tightening cycle, having hiked 300 points since March. A 75 bp move today will bring the benchmark rate to 4 per cent, its highest level since the 2008 global financial crisis. Of course, the economic picture is not nearly as grim as it was then, but inflation has been more stickier than expected, and the BoC has declared that its first priority is to curb inflation. In September, headline inflation ticked lower to 6.9%, down from 7.0%, but core inflation rose to 6.0%, up from 5.8%. Until this report, the markets had been expecting the BoC to deliver a 50 bp hike at tomorrow’s meeting, but the September inflation data has raised the likelihood that policy makers will come out with guns blazing and increase rates by 75 bp. At the same time, there is an outside chance that the Bank will opt for a 50 bp hike, mindful that higher rates are weighing heavily on consumers and businesses and a recession could be lurking just around the corner. With inflation driving the Bank of Canada’s rate policy, I would not be surprised to see some volatility from the Canadian dollar in the North American session.   USD/CAD Technical USD/CAD is testing support at 1.3656. Below, there is support at 1.3467 1.3718 and 1.3807 are resistance lines       This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD hits 3-week high ahead of BoC - MarketPulseMarketPulse
It's not clear we find out the results of mid-term elections immediately. Binance to buy FTX

US crude oil exports up, New Zealand dollar supported by risk appetite, Canadian dollar "softened"

Jing Ren Jing Ren 27.10.2022 08:41
USDCAD tests key support The Canadian dollar softened after the BoC surprised the market with a smaller-than-expected rate hike. On the daily chart, the rally came to a halt in the supply zone from May 2020 under 1.4000. The greenback is testing the recent low at 1.3500, a key level to keep short-term buyers interested. A lack of bids suggests that traders could be wary of chasing after an already high exchange rate. A breakout would force the bulls to bail out and trigger a deeper correction with 1.3360 as the next target. 1.3640 is the closest resistance. NZDUSD bounces higher The New Zealand dollar climbs as soft US data raises risk appetite. The daily resistance at 0.5810 has been capping the recent price action. But a ‘buy-the-dips’ behaviour off March 2020’s low (0.5500) has offered the kiwi effective support. A series of higher lows indicates growing buying pressure. A bullish breakout would prompt sellers to cover their bets, paving the way for an extended rally should momentum pick up. 0.5880 would be the next stop and 0.5730 at the base of the breakout the first support in case of a pullback. USOIL finds support WTI crude rallied after data showed a rise in US crude exports. The price has stabilised near a 3-week low (82.00). A bullish MA cross on the daily chart suggests a potential acceleration to the upside. Cautious traders may wait for a bullish breakout as a form of confirmation. After a break above 87.00, sentiment would only start to shift in the bulls’ favour if they succeed in pushing past the support-turned-resistance at 89.80. 85.00 is a fresh support and 82.00 an important floor to keep the current bounce valid.
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Bank of Canada didn't go for 75bp, but... if Fed do so, the rate differential will be larger

Kenny Fisher Kenny Fisher 27.10.2022 16:12
The Canadian dollar is in negative territory today. In the European session, USD/CAD is trading at 1.3607, up 0.39%. Bank of Canada surprise The Bank of Canada unleashed a dovish surprise on Wednesday as it raised rates by 0.50%, below the consensus of a 0.75% hike. This follows the 0.75% hike in September and brings the cash rate to 3.75%, its highest level since 2008. The BoC acknowledged that there is no “meaningful evidence” that inflation is falling and said that it still expects to have to increase rates, given that inflation remains high. This raises the question of why did the BoC not press the pedal to the floor and deliver a 0.75% hike if inflation remains persistently high? The answer lies in the growth forecasts that the BoC released at the meeting. GDP for Q4 2022 is expected to slow to 0.5% YoY, while GDP in 2023 has been slashed to 0.9%, down from the previous estimate of 1.7%. The Bank said that the economy could produce two quarters of negative growth. If this does happen, the economy would technically be in a recession. The economy is clearly slowing down as a result of the steep increase in rates, and the BoC is easing up, in the hopes of guiding the economy to a soft landing and avoiding a recession. High rates are weighing on households and businesses and the BoC may be concerned that further oversize rates may pose a risk to financial stability. The BoC’s 0.50% hike could pose a headwind for the Canadian dollar. If the Federal Reserve raises rates by 0.75%, as is widely expected, this will lead to a widening in the US/Canada rate differential. The Canadian dollar has taken advantage of recent weakness in the US dollar and has risen about 2 per cent since October 17th. USD/CAD Technical USD/CAD is testing support at 1.3656. Below, there is support at 1.3467 1.3718 and 1.3807 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar dips after BoC's dovish hike - MarketPulseMarketPulse
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Upside Trend Can Be Challenged

TeleTrade Comments TeleTrade Comments 28.10.2022 08:55
USD/CAD takes offers to reverse the previous day’s bounce off monthly low. RSI, MACD suggests further downside past immediate horizontal support. 50-DMA, two-month-old ascending trend line lures bears, fortnight-long resistance line, 21-DMA test buyers. USD/CAD appears all-set to print a two-week downtrend as sellers approach a short-term key horizontal support during early Friday morning in Europe. In doing so, the Loonie pair slides to 1.3530 as it fades Thursday’s recovery from the lowest levels in a month. Not only the inability to rebound from the three-week-old region surrounding 1.3500, but the bearish MACD signals and the RSI (14) also keep the sellers hopeful of breaking the nearby support zone. Following that, a downward trajectory towards the 50-DMA level near 1.3430 and then to the upward-sloping support line from early August, at 1.3280 by the press time, will lure the USD/CAD bears. In a case where the pair sellers dominate past 1.3280, the early September top near 1.3210 will precede the 1.3200 round figure to restrict the quote’s further downside. On the flip side, recovery remains elusive below a two-week-old descending resistance line, close to 1.3660 by the press time. It’s worth noting that the USD/CAD upside past 1.3660 will be challenged by the 21-DMA hurdle of 1.3700, a break of which could convince bulls to attack multiple resistance levels near 1.3840 and the monthly high near 1.3980. USD/CAD: Daily chart Trend: Further downside expected
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

The Recent Interest Rate Hike By The Bank Of Canada Was Deemed Dovish

Kenny Fisher Kenny Fisher 28.10.2022 14:41
The Canadian dollar is lower today. In the European session, USD/CAD is trading at 1.3617, up 0.39%. Markets eye Canada’s GDP The week wraps up with Canada’s GDP for August. The economy is expected to have expanded by 0.1%, which would be unchanged from July. The economy is likely heading into a recession, and Finance Minister Chrystia Freeland stated recently that the coming months would be a “challenging economic time.” The government’s key priority is curbing high inflation, which has eased slightly. In September, inflation fell to 6.9%, down from 7.0% in August. Still, this was higher than the consensus of 6.7%, as soaring food prices kept inflation from falling further. The good news is that inflation appears to have peaked from the June level of 8.1%, which marked a 40-year high. The bad news is that core inflation was unchanged at 5.3% in September, a sign that inflation remains sticky, despite the Bank of Canada’s aggressive rate-hiking cycle. High inflation pushed the BoC to deliver another oversize rate on Wednesday, but the 0.50% hike was considered dovish, as the consensus stood at 0.75%. The cash rate is now at 3.75%, its highest level since 2008. Although inflation is far from being beaten, Canada’s economy is clearly slowing down as a result of the steep increase in rates, and the BoC is easing up on the rate pedal just a bit, in the hopes of guiding the economy to a soft landing and avoiding a recession. High rates are weighing on households and businesses and the BoC is concerned that further oversize rates may pose a risk to financial stability. The US releases Personal Income and Spending data later today as well as the Fed’s preferred inflation indicator, the Core PCE Price Index. The index is expected to rise to 5.2%, up from 4.9%, but I don’t expect today’s numbers to change the Fed’s plan to raise rates by 0.75% next week. . USD/CAD Technical There is support at 1.3656 1.3467 1.3718 and 1.3807 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

A Key Factor Has Emerged That Could Weaken The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 31.10.2022 09:47
USD/CAD gains traction for the third straight day and is supported by a combination of factors. Sliding crude oil prices undermines the loonie and acts as a tailwind amid modest USD strength. The upside seems limited as the focus remains glued to the FOMC policy decision on Wednesday. The USD/CAD pair attracts some buying for the third successive day on Monday and maintains its bid tone through the early European session. The pair is currently placed around the 1.3635 region and might now be looking to build on its bounce from levels just below the 1.3500 psychological mark, or over a one-month low touched last Thursday. Crude oil prices come under some selling pressure on Monday after weaker-than-expected Chinese business activity data revives fears about a deeper global economic downturn and slowing fuel demand. This, in turn, undermines the commodity-linked loonie and is seen as a key factor acting as a tailwind for the USD/CAD pair amid a modest US dollar strength. Furthermore, the disappointing Chinese economic data temper investors' appetite for riskier assets, which is evident from a softer tone around the equity markets. Apart from this, elevated US Treasury bond yields, bolstered by expectations for another supersized 75 bps hike by the Federal Reserve, lends additional support to the safe-haven greenback. That said, speculations that the Fed will soften its hawkish tone - amid signs of a slowdown in the US economy - might hold back the USD bulls from placing aggressive bets. Hence, investors might prefer to move to the sidelines ahead of the key central bank event risk - the outcome of the highly-anticipated two-day FOMC policy meeting on Wednesday. Adding to this, expectations of tight supply should limit any deeper losses for crude oil prices and further contribute to capping gains for the USD/CAD pair. In the absence of any major market-moving economic releases, either from the US or Canada, the mixed fundamental backdrop warrants some caution before positioning for any further intraday gains.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Prospects For Some Dip-Buying Around The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 01.11.2022 09:47
A combination of factors prompts aggressive selling around USD/CAD on Tuesday. Rising oil prices underpin the loonie and exert pressure amid a modest USD downtick. The downside seems limited amid recession fears and ahead of the FOMC meeting. The USD/CAD pair comes under heavy selling pressure on Tuesday and extends the overnight late pullback from the 1.3685 region, or a multi-day high. The downward trajectory drags spot prices to a fresh daily low, around mid-1.3500s during the early European session and is sponsored by a combination of factors. Crude oil prices regain positive traction after OPEC said that demand will be higher than initially expected in the medium to long term. This, in turn, underpins the commodity-linked loonie and exerts some downward pressure on the USD/CAD pair amid the emergence of some selling around the US dollar. The global risk sentiment gets a boost following the release of Chinese Caixin Manufacturing PMI, which improved to 49.2 in October from 48.1 previous. The upbeat market mood, along with speculations that the Fed will soften its hawkish stance amid signs of a slowdown in the US economy, is seen weighing on the safe-haven greenback. Investors, however, remain concerned about the fuel demand outlook in the wake of China's strict zero-COVID policy amid the resurgence of cases in Shanghai and Wuhan. This could act as a headwind for the black liquid. Apart from this, the protracted Russia-Ukraine war might also contribute to keeping a lid on any optimism in the markets. Furthermore, expectations that the Fed will deliver another supersized 75 bps rate hike at the end of a two-day policy meeting on Wednesday should limit the downside for the buck. This, in turn, supports prospects for the emergence of some dip-buying around the USD/CAD pair and warrants some caution for aggressive bearish traders. Market participants now look forward to the US economic docket, highlighting the release of the ISM Manufacturing PMI later during the early North American session. This, along with the broader risk sentiment, will influence the USD. Traders will further take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The USD/CAD Pair Is Moving Towards The Bullish Level

TeleTrade Comments TeleTrade Comments 02.11.2022 09:06
USD/CAD bounces off intraday low to pare the first daily loss in five. Bullish chart formation keeps buyers hopeful but 200-SMA adds strength to the 1.3655-60 hurdle. Bears have a bumpy road to the south unless breaking 1.3495 level. USD/CAD remains mildly offered around 1.3605 ahead of Wednesday’s European session, posting the first daily loss in five at the latest. The Loonie pair’s weakness could be linked to its retreat from the 1.3655-60 resistance confluence comprising the 200-SMA and a downward-sloping trend line from October 13. The pullback moves, however, lack acceptance amid steady RSI, which in turn challenges the pair sellers. Even so, the one-week-old ascending support line, near 1.3540 by the press time, precedes the aforementioned triangle’s bottom, near 1.3495, to welcome the USD/CAD bears. Should the quote remains weak past 1.3495, the bullish chart formation gets defied, which in turn directs the USD/CAD pair towards the 61.8% Fibonacci retracement level of September-October upside, near 1.3340. Alternatively, recovery remains elusive unless the quote stays below the 1.3655-60 resistance confluence. Following that, multiple levels around 1.3700 and 1.3850 could challenge the USD/CAD buyers before directing them to the previous monthly high near 1.3980. It should be noted that the RSI is approaching the overbought territory and can poke bulls around 1.3980, if not then the 1.4000 threshold could act as an extra filter to the north. USD/CAD: Four-hour chart Trend: Limited downside expected
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

The Fed Meeting Ahead Is A Key In The Reversal Of Markets

InstaForex Analysis InstaForex Analysis 02.11.2022 11:01
Large movements may be seen in markets today after the release of Fed's decision on monetary policy. Earlier, many expressed their belief that the US central bank will make its last rate increase this month, signal an easing, then take a short pause to assess the impact of the previous rate hikes on the country's economy. If this really happens, the US stock market will bounce up, with the trend shifting from bearish to bullish. But if the opposite occurs and the Fed makes it clear that it is too early to change their view on the pace of rate hikes, another wave of sell-offs will take place, especially in the stock markets, while US Treasury yields will rise. In short, the Fed meeting ahead is a key in the reversal of markets, though a lot will depend if the US economy is entering a recession or not. Another factor is the quarterly reports of companies. As for dollar, the change in the Fed's policy will put pressure on it, possibly causing noticeable changes. The behavior of Treasury yields will also affect USD, in which a decline will lead to a price decrease. If there are no changes, dollar will climb further, while gold prices may update recent lows. So far, a change in the Fed's policy is highly likely since members have recently stated their support on the slowdown of rate hikes. The stabilization of consumer inflation may also convince the central bank to resort to this option. Forecasts for today: EUR/USD A change in the Fed's policy could push the pair above 0.9900, to 1.0050 and then to 1.0150. USD/CAD The weakening of dollar and increase in oil prices could bring the pair down to 1.3500 after falling below 1.3570.     Relevance up to 08:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326010
Oanda's Kenny Fisher talks US dollar against Canadian dollar

There Are An Additional Challenge For The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 03.11.2022 08:58
USD/CAD retreats from seven-day high, prints the first daily loss in six. Convergence of previous resistance, 200-SMA challenges sellers amid upbeat RSI conditions. Multiple hurdles to test bulls before the yearly top. USD/CAD seesaws around the intraday low as it pares the first weekly gain in three heading into Thursday’s European session. In doing so, the Loonie pair makes rounds to 1.3700, after flashing the day’s low of 1.3682. Even so, the quote defends the previous day’s upside break of a downward-sloping resistance line from October 13, now supporting around 1.3670. Also increasing the strength of the 1.3670-65 area is the 200-SMA. It’s worth noting that the firmer RSI (14) and a successful break of the previous key resistances keep the USD/CAD buyers hopeful of reaching the yearly top surrounding 1.3980. However, multiple hurdles near 1.3750 and 1.3830 could test the upward trajectory. In a case where the Loonie pair remains firmer past 1.3980, the 1.4000 psychological manget may act as an extra check for the bulls before directing them to the May 2020 high near 1.4175. Meanwhile, a downside break of the resistance-turned-support confluence near 1.3670-65 isn’t an open welcome to the USD/CAD bears as a weekly ascending trend line, close to 1.3550, offers an additional filter to probe the declines. Additionally challenging the pair’s south run is the horizontal support including multiple lows marked since early October, near 1.3500. USD/CAD: Four-hour chart Trend: Bullish
US dollar recoups losses as Fed warns of the higher-than-expected "ultimate" interest rate target

US dollar recoups losses as Fed warns of the higher-than-expected "ultimate" interest rate target

Jing Ren Jing Ren 03.11.2022 08:33
USDCAD finds strong support The US dollar recovered after the Fed cautioned that rates could go higher than expectations. The rally has come to a halt in May 2020’s consolidation area. A combination of profit-taking and fresh selling has weighed on short-term sentiment. A tentative break below the daily support 1.3500 has put the bulls under pressure. A bearish breakout would force them to bail out and trigger a deeper correction below 1.3300. 1.3750 is the first resistance and the bulls will need to clear 1.3850 before the uptrend could resume. XAUUSD hits resistance Gold softened after the US dollar regained strength post-FOMC. After the price gave up all the gains from its rally in early October, the latest rebound met stiff selling pressure near the support-turned-resistance 1670. A long bearish wick suggests a rejection of this level. As wrong-footed traders scramble for the exit, 1618 is key in keeping the precious metal afloat. Its break would signal a bearish continuation in the days to come. 1645 is a fresh obstacle where the bears could be looking to double down on the prevailing pessimism. UK 100 struggles for support Equities turned south after the Fed sees a pause in tightening as premature. The FTSE reversed its course at a former support (7200) on the daily chart. The recent rally could use some breathing room after it broke above the daily resistance at 7100. After the RSI swung back into oversold territory, 7080 is the first level to gauge the strength of follow-up interests. The psychological level of 7000 would be an important support to keep the bulls interested. 7200 is a fresh peak and a bullish breakout would carry the index to 7330.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Crude Oil Situation Has Been Weighing On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 04.11.2022 08:57
USDCAD takes offers to refresh intraday low, snapping six-day uptrend. Cautious optimism in the market joins firmer oil prices, US dollar pullback to tease pair sellers. Fed versus BOC play can keep bulls hopeful even if the US jobs report fail to impress DXY buyers. USDCAD cheers the broad US dollar pullback, as well as a mildly positive market mood, as it prints the first intraday loss in seven. That said, the Loonie pair takes offers to refresh the daily low near 1.3680 during early Friday morning in Europe. That said, the US Dollar Index (DXY) retreats from a fortnight high to pare the biggest weekly gain in seven, refreshing intraday low around 112.60 by the press time. The greenback’s latest losses could be linked to the hopes of witnessing positive news surrounding the Russia-Ukraine tussles as leaders from Germany and China meet. Also, the People’s Bank of China’s (PBOC) efforts to defend the Chinese Yuan (CNY) join the pre-data consolidation to add strength to the risk-on mood. It should be noted that the firmer prices of the Crude Oil, Canada’s main export item, also weigh on the USDCAD of late. WTI crude oil rises 1.25% intraday to $88.45 at the latest. Alternatively, the hawkish plays of the US Federal Reserve (Fed) contrast with the Bank of Canada’s (BOC) easy rate hike to favor buyers. Also, strong yields and fears of an economic slowdown are extra catalysts keeping the USDCAD bulls hopeful. Amid these plays, the US stock futures print mild gains and the yields remain firmer whereas the Asia-Pacific equities print notable gains led by China. Moving on, the employment data from the US and Canada will be crucial for the USDCAD pair traders to watch and might help the recent sellers to keep the reins amid downbeat market consensus for the US numbers. Forecasts suggest that the headline US NFP could ease to 200K in October from 263K prior while the US Unemployment Rate may increase to 3.6% from 3.5% prior. On the other hand, Canada’s Net Change in Employment may also ease to 10K versus 21.1K prior with the Unemployment Rate likely witnessing an uptick to 5.3% from 5.2% prior. Even so, the Fed versus the BOC game is in the favor of the USDCAD bulls and hence any pullback could be considered non-lucrative for sellers. Technical analysis USDCAD retreats from a six-week-old horizontal resistance, around 1.3825-10, but the downside remains elusive unless the quote stays beyond a convergence of the 50-DMA and lows marked since late October, close to 1.3500.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Strong Domestic Data Should Provide Lift To The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 04.11.2022 12:34
Canadian employment details overview Statistics Canada is scheduled to publish the monthly employment report for October later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 10K jobs during the reported month, down from the 21.1K rise reported in September. The unemployment rate is anticipated to edge higher from 5.2% to 5.3% in October. According to analysts at NBF: “Recent economic indicators point to a slowdown in growth in Canada, a phenomenon that could be reflected in employment data. Layoffs may well have remained low during the month, but we believe this could have been offset by a slowdown in hiring amid declining small business confidence. Our call is for a 5K increase. Despite this gain, the unemployment rate may increase from 5.2% to 5.4%, assuming the participation rate rose one tick to 64.8% and the working-age population grew at a strong pace.” How could the data affect USDCAD? The data is more likely to be overshadowed by the simultaneous release of the closely-watched US jobs report - popularly known as NFP. That said, a significant divergence from the expected readings should influence the Canadian dollar and provide some meaningful impetus to the USDCAD pair. In the meantime, a sharp intraday rise in crude oil prices, to a nearly one-month high, underpins the commodity-linked Loonie. This, along with a modest US Dollar pullback from a two-week high touched on Thursday, is seen exerting heavy downward pressure on the major. Strong domestic data should provide an additional lift to the Canadian dollar and pave the way for a further intraday depreciating move for the USDCAD pair. Spot prices might then turn vulnerable to weaken further below the 1.3600 mark and aim back to test the 1.3500 psychological mark, which now coincides with the 50-day SMA. Conversely, any disappointment from the Canadian jobs data and (or) upbeat US NFP report should assist the USDCAD pair to attract fresh buying. Any attempted recovery, however, might confront some resistance near the 1.3675-1.3680 region. This is closely followed by the 1.3700 round figure and the next relevant hurdle near the 1.3735-1.3740 region. A sustained strength beyond the latter will negate any near-term negative bias and allow spot prices to aim back to conquer the 1.3800 mark. Key Notes   •  Canadian October Jobs Preview: Labor market upturn in the doldrums   •  Canadian Jobs Preview: Forecasts from five major banks, quite tepid jobs gain in October   •  USDCAD remains heavily offered below mid-1.3600s ahead of US/Canadian jobs data About the Employment Change The employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive, or bullish for the CAD, while a low reading is seen as negative or bearish. About the Unemployment Rate The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to weaken the Canadian economy. Normally, a decrease of the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.    
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Any Misses In The Forecasts For The Job Reports Could Make Volatility From The USD/CAD Pair

Kenny Fisher Kenny Fisher 04.11.2022 14:21
The Canadian dollar is usually quiet before North American markets open, but it is sharply higher today. USD/CAD is trading at 1.3644 in Europe, down 0.73%. US nonfarm payrolls expected to slow The week wraps up with the October employment reports from the US and Canada. The highlight will be the US nonfarm payrolls report, which, although still a key event, has been somewhat overshadowed by Fed rate meetings and inflation releases. Still, the release will be carefully watched by Fed policymakers and it will be a factor in the December rate decision. The October consensus stands at 200,000, lower than the September reading of 263,000. With the markets split 50/50 on whether the Fed will raise rates by 0.50% or 0.75%, the NFP release could provide some volatility in the currency markets in the North American session. A stronger-than-expected reading would raise the likelihood of a 0.75% hike and would likely boost the dollar. Conversely, a soft reading would reinforce expectations of the Fed easing to 0.50%, which would be bearish for the dollar. Canada is expected to post lukewarm job data for October. The unemployment rate is forecast to tick up to 5.3% from 5.2%, with a consensus of 10,000 new jobs, down from 21,100 new jobs in September. Any misses in the forecasts for the Canadian and US job reports could trigger volatility from USD/CAD in the North American session. The Fed raised rates by 0.75% at this week’s meeting, as expected, but there was a double message for the markets. The rate statement was dovish, stating that the Fed might take a pause in order to see how the rate hikes were working. However, Fed Chair Powell was hawkish in his post-meeting comments, saying that there was no sign that inflation had peaked and that it was “very premature to talk about pausing rate hikes”. The unexpected hawkish tone sent equities lower and boosted the US dollar.   USD/CAD Technical USD/CAD is putting strong pressure on support at 1.3656. Below, there is support at 1.3478 1.3757 and 1.3901 are the next lines of resistance This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Greenback went down as the US unemployment rate goes higher, loonie got stronger

Jing Ren Jing Ren 07.11.2022 08:33
USDCHF struggles for support The US dollar plunged after data showed a higher US unemployment rate in October. A break below 1.0000 could prolong the consolidation as the parity level has been acting like a magnet, pulling the price back and forth. With the RSI deeply in the oversold area. Trend followers may see the pullback as an opportunity to stake in. 0.9920 is the first support and 0.9840 a critical level to keep the price afloat. 1.0020 is a fresh resistance and a bounce above 1.0140 could pave the way for a rally to a six-year high at 1.0350. USDCAD breaks critical support The Canadian dollar soared after solid jobs data raised bets for a large-sized rate hike by the BoC. The pair has been struggling to hold onto its gains above October’s lows (1.3500), which was a critical level to keep the rally relevant in the short-term. A previous rally came under pressure in the supply zone around 1.3800, then a fall below 1.3600 revealed that the bears have regained control. A dip below 1.3500 would extend losses towards 1.3400. An oversold RSI may cause a limited rebound with 1.3600 as the first hurdle. GER 40 breaks major ceiling The Dax 40 rallies as mixed US jobs data lift risk appetite across asset classes. The index previously met stiff selling pressure near September’s high around 13450. A combination of profit-taking and fresh selling in this supply zone has weighed on the short-term price action. But the fallback has only shaken out weak hands and the swift recovery with a higher high indicates that the bulls are still in play. The bullish breakout could lift offers to the August high (13950). 13100 is the support should the Dax need some breathing room.
The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

Kenny Fisher Kenny Fisher 07.11.2022 12:56
The Canadian dollar is almost unchanged today, trading at 1.3483. Canadian dollar flies on job gains It was a day to remember for the Canadian dollar, which rocketed almost 2% higher on Friday. The driver behind the spike was a massive gain in jobs at 108, 300 in October, up from 20,000 in September. The reading crushed the forecast of 10,000. Wage growth rose to 5.5%, up from 5.2%, while the unemployment rate was unchanged at 5.2%. The employment gain was especially impressive as it was spread across the economy and was made up entirely of full-time jobs. The Bank of Canada, which hiked rates to 3.75% after a 50 basis point increase in late October is likely to respond with additional oversize hikes. The markets have priced in a 70% chance of a 50 basis point increase in December, and the terminal rate is projected at 4.5%.  At the October meeting, BoC Governor Macklem said that the BoC was closer to ending the tightening cycle, while acknowledging that the BoC was far from achieving its goal of lowering inflation to its 2% target. Headline inflation has slowed to 6.9%, but core inflation has persisted. In the US, the nonfarm payrolls sent mixed and somewhat confusing signals to the market. The October reading of 261,000 was stronger than the consensus of 200,000, but it marked the smallest gain since December 2020. The unemployment rate rose to 3.7%, up from 3.5%, while wage growth rose to 5.5% YoY, up from 5.2%. The latter release is likely to keep the Fed concerned about inflationary pressures. Bottom line? The jobs report indicates that the labour market remains robust and although a 50-bp hike is likely, a 75-bp move remains a possibility. There is one more employment report and two more inflation releases ahead of the December 14th FOMC decision, each of which should be treated as a market-mover.   USD/CAD Technical USD/CAD faces resistance at 1.3420 and 1.3586 There is support at 1.3364 and 1.3248 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Oanda's Kenny Fisher talks US dollar against Canadian dollar

The USD/CAD Pair Joins To The Bearish Signals

TeleTrade Comments TeleTrade Comments 08.11.2022 08:41
USDCAD picks up bids to extend the previous day’s rebound from six-week low. Bearish MACD signals, steady RSI keep sellers hopeful. Buyers can return unless breaking 1.3340, inverted hammer challenges bearish bias. USDCAD extends the week-start rebound to 1.3510 during early Tuesday morning in Europe. In doing so, the Loonie pair justifies the previous day’s “inverted hammer” bullish candlestick while poking the 50-DMA hurdle. It should be noted, however, that the Loonie pair’s sustained break of a one-month-old horizontal area surrounding 1.3500 during the last week joins the bearish MACD signals to suggest the quote’s underlying weakness in momentum. Hence, the latest rebound appears elusive unless the quote provides a daily closing beyond the 50-DMA hurdle surrounding 1.3515. Following that, a gradual run-up toward s1.3610 and 1.3720 can’t be ruled out. However, multiple hurdles around 1.3840-50 could challenge the USDCAD bulls afterward. Meanwhile, fresh sellers could wait for the quote’s downside break of the latest swing low, around 1.3465. Following that, a convergence of the 50% Fibonacci retracement level of the pair’s August-October upside and a three-month-old ascending support line, surrounding 1.3350-40, will be crucial to watch for the USDCAD bears. Should the quote provides a daily closing below 1.3340, the odds of witnessing a slump toward the early September highs near 1.3210 can’t be ruled out. Adding strength to the said support is the 61.8% Fibonacci retracement level, also known as the golden ratio. USDCAD: Daily chart Trend: Limited upside expected
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The Loonie (USD/CAD) Pair Is Showing Recent Weakness

TeleTrade Comments TeleTrade Comments 09.11.2022 08:58
USDCAD seesaws around multi-day low, picks up bids of late. Challenges to sentiment from the US election results, China’s covid conditions test USDCAD bears. DXY rebound, higher inventories weigh on oil prices. Risk catalysts eyed for directions ahead of US CPI, speech from BOC’s Macklem. USDCAD grinds near 1.3450 heading into Wednesday’s European session amid dicey markets. The anxiety over US government gridlock joins covid fears from China and a cautious mood ahead of the key data/events to restrict the Loonie pair’s latest moves. That said, softer prices of Canada’s key export item, namely the WTI Crude Oil, tease the USDCAD bulls. The energy benchmark drops for the third consecutive day down 0.85% intraday near $87.75 by the press time. Also read: WTI bears attack $88.00 as concerns over China’s demand, US midterm elections join API inventory build Elsewhere, the US Dollar Index (DXY) prints mild gains around 109.70 amid the escalating fears of the US government gridlock due to the latest updates from the mid-term elections. Also fueling the market’s fears and the USDCAD prices could be the headlines suggesting a six-month high covid number from China and further virus-led lockdowns. While portraying the market’s mood, the S&P 500 Futures struggle to track Wall Street’s gains while the US 10-year Treasury yields probe bears after snapping a four-day downtrend the previous day. It should be noted, however, that the anxiety ahead of Thursday’s US Consumer Price Index (CPI) for October and a speech from the Bank of Canada (BOC) Governor Tiff Macklem challenge the pair buyers. The reason could be linked to the recently mixed US data and Fedspeak, as well as the BOC’s easing in the rate hikes. Also read: US Inflation Preview: Markets set to seize on falling Core CPI to revive pivot play, three scenarios Technical analysis A one-week-old descending trend line portrays the USDCAD pair’s recent weakness. Also keeping the sellers hopeful are the bearish MACD signal and the clear break of the previous support line from early October. Additionally, the pair’s sustained trading below the 200-SMA also adds strength to the downside bias.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The USD Could Yet Reject This Breakdown Attempt | Weak Risk Sentiment Could Provide The Strongest Support For The JPY

Saxo Bank Saxo Bank 09.11.2022 13:25
Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look set to take narrow control of the House of Representatives. FX Trading focus: Next test for struggling USD over tomorrow’s US CPI data. The US mid-term election results are still rolling in this morning in Europe, with the Republicans set to take a small majority in the House and the Senate outcome looking at risk of riding on the outcome of a Georgia run-off election on December 6th as neither candidate looks set to achieve the 50% required for elections there. Remember that we had a similar setup after the 2020 election when two Senate races in Georgia were only decided in a January 5 run-off. There are no real market conclusions from the outcome, even if the Georgia race gives the Republicans a majority in the Senate, as the only scenario that would have guaranteed dramatic potential for fiscal policy would have been the Democrats surprisingly retaining both houses. Other conclusions: Trump is a liability for the Republican party, which likely would have done far better without his involvement, and forensic studies of split-ticket voting will likely confirm this, and it will be interesting to see if this deters his possible renewed ambitions for the presidency. Finally: razor thin Georgia results keep alive the narratives around election fraud, etc. Can the US move beyond its dysfunctional elections by 2024 or will the republic face an existential test in that election cycle? Back to incoming data, with tomorrow’s US October CPI in focus. Let’s recall that the September CPI data point was a real shocker as many qualified slicers and dicers of the data were looking for a deceleration in the core data rather than the acceleration we got. That has me leaning for a slightly softer release tomorrow. But I am far more interested in the nature of the market reaction. As I have discussed the last couple of days on the Saxo Market Call podcast, I find the most interesting test for the US dollar one in which we see inflation decelerating and US treasury yields perhaps easing a bit lower, but in which we also see risk sentiment weak as equity and bond markets are starting to decouple, as equities begin to fret recession rather than being merely led around by the nose by the treasury market. If that is the scenario we get and the USD weakens, then I think USD weakness can extend a bit more forcefully for a time, if not, then the USD could yet reject this breakdown attempt. I withhold judgement for now, as the USD has not yet broken down. But the easiest thing to do is to simply judge what happens on the charts in the wake of the data release (not knee-jerk, but how the day closes), as we have a number of clear-cut levels in play for the major USD pairs. Chart: USDJPY USDJPY has traditionally been a strong focus over US data surprises over the years and will be in focus with the macro event risk of the week, if not the month, coming up tomorrow in the form of the US October CPI release. Reaction in yields and risk sentiment are both worth watching as I have cooked up some thoughts of late (see above) on whether US treasury markets and equity markets could move out of correlation, i.e., that risk sentiment may have a hard time celebrating a drop in treasury yields. So, a weaker than expected US CPI report together with falling treasury yields, but also together with weak risk sentiment could provide the strongest support for the JPY here in a broad sense, though it might be felt more forcefully in JPY crosses. Regardless, if the JPY finds bids tomorrow, the 145.00 level will be a huge focus in USDJPY. Table: FX Board of G10 and CNH trend evolution and strength.The USD is clearly down, but will only be out on sticking further weakness in the wake of the US CPI release tomorrow. Elsewhere, note the sterling momentum turning badly south and SEK trying to look higher, not a surprise given European equities having rallied vertically for weeks – looking a bit much. Table: FX Board Trend Scoreboard for individual pairs.EURGBP is one to focus on around the 0.8800 level. JPY crosses are interesting in places as well as yields have consolidated a bit lower – look at the 165 area in GBPJPY, for example. But it is all about key USD levels after the US data tomorrow, including 1.0100 in EURUSD, 0.6522 in AUDUSD, etc… Upcoming Economic Calendar Highlights 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-on-edge-ahead-of-the-us-cpi-data-tomorrow-09112022
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Loonie (USD/CAD) Bulls Are Supported By A Hawkish Commentary From The Bank Of Canada

TeleTrade Comments TeleTrade Comments 11.11.2022 08:47
USDCAD has witnessed barricades around 1.3350 amid positive market sentiment. Loonie bulls are supported by BOC’s hawkish commentary and a recovery in oil prices. Going forward, US long-term inflation report will be of utmost importance. The USDCAD pair has sensed selling pressure around 1.3350 in the Tokyo session after attempting a pullback move around 1.3300. The asset has turned sideways which indicates further inventory distribution, which will deliver more weakness in the counter. Meanwhile, the risk profile has strengthened further as S&P500 futures are extending their gains post a bumper rally on Thursday. The US dollar index (DXY) has refreshed its day’s low at 108.00 and is expected to display more downside ahead. A sheer decline in US inflation brought a bloodbath in US government bonds. The 10-year US Treasury yields dropped to 3.8% as chances from the CME FedWatch tool claim that 75 basis points (bps) rate hike is losing its stream now. Going forward, investors will focus on long-term US inflation expectations. The US economy is needed to pass this test too as an increment in the longer-term inflation indicator may spoil the party for risk-perceived assets. The Fed has been continuously reiterating that their long-term inflation expectations are well-anchored at around 2%. And, previously the economic data landed at 2.9%. Meanwhile, Loonie bulls are supported by a hawkish commentary from the Bank of Canada (BOC) Governor Tiff Macklem and a decent recovery in the oil prices. BOC Governor cited that “Canadians should expect even more rate hikes to come on top of six that have already happened this year,” during an interview with CBC News in the late New York session. He further added that layoffs will increase, the growth rate may come to zero in the next few quarters, and the central bank is fine with a mild recession as a price to bring down inflation to desired levels. Oil prices have rebounded as a decline in US inflation has trimmed the risk of recession. A slowdown in the rate hike pace by the Fed may bring a recovery in the scale of economic activities, which will eventually accelerate oil demand ahead.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Loonie Investors (USD/CAD) Are Awaiting For Further Guidance

TeleTrade Comments TeleTrade Comments 14.11.2022 09:00
USDCAD has sensed buying interest around 1.3250 as DXY rebounds ahead of US midterm elections outcome. The change of the House of Representatives' stewardship to Republicans will dampen expansionary policies. Loonie investors are eyeing the release of the inflation figures. The USDCAD pair is displaying a rangebound structure after gauging the cushion around 1.3250 in the Tokyo session. The risk-on impulse has started fading led by rising volatility ahead of the outcome of the US midterm elections and the extended weekend due to the Veterans Day holiday last Friday. The risk-sensitive currencies are facing a loss in the upside momentum. Anxiety ahead of the US midterm elections has weighed on S&P500 futures. The changing hands of stewardship for the House of Representatives will impact the expansionary policies as additional approval from Republicans will stretch the time for policy execution. Investors have turned anxious as the occurrence could trim economic projections ahead in already vulnerable times when the US economy is subject to recession due to accelerating interest rates. The US dollar index (DXY) has extended its pullback move to near 107.00 despite the fact that the Federal Reserve (Fed) won’t go for hefty rate hikes as red-hot inflation has cooled down. Also, the long-term US Treasury yields have rebounded to near 3.90%. Meanwhile, Loonie investors are awaiting Wednesday’s inflation numbers for further guidance. The headline Consumer Price Index (CPI) is seen marginally higher at 7.0% vs. the prior release of 6.9%. While the core CPI that excludes oil and food prices is seen at 6.3%, higher than the prior release of 6.0%. On the oil front, oil prices have dropped after facing barricades of around $89.00 despite easing Covid-19 restrictions in China. It seems that oil bulls need some solid reasoning for extending its recent rally further.
Long-Term Rates Diverge Amid Policy Divergence and Economic Signals

Foreign exchange market: this week is full of inflation prints releases as we're about to hear from Sweden, Canada, UK and more

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 14.11.2022 14:50
The news that markets had been desperately hoping for finally arrived last week. Inflation in the US came out lower than expected, US rates dropped the most since the pandemic era and risk assets worldwide soared in jubilation. The dollar experienced one of the sharpests two-day falls in history, falling anywhere from nearly 6% (against the Japanese yen) to just under two percent (against the Canadian dollar, the week’s second-worst performer). Emerging market currencies also rose. The notable exception was the Brazilian real, where markets had a brutal reaction to a Lula speech suggesting that he favours Truss-style unfunded spending.   This week the focus will be on a raft of inflation reports for the month of October in several G10 countries including Sweden, Canada, the UK, and Japan. These will be scrutinised for signs that inflation is peaking, though we think that the positive surprise out of the US last week cannot be extrapolated to other economic areas. We will also be paying attention to two scheduled speeches from ECB President Lagarde. For now, the relentless dollar rally appears to have peaked, and the path of least resistance for the greenback may be down in the short-term. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 14/11/2022 British pound Last week’s third-quarter GDP report had mixed news. It was better than expected, but still negative. This means the UK may be in a technical recession already, albeit so far the numbers are consistent with a short, shallow one. Figure 2: UK GDP Growth Rate [MoM] (2013 – 2022) Source: Refinitiv Datastream Date: 14/11/2022 This week will be an intense one for data out of the UK. The employment report on Tuesday will be followed by the inflation data on Wednesday. The former is expected to show strong payrolls growth for October. The latter, steady core inflation well above 6%. Technical recession or not, we do not think that the Bank of England can afford to stop tightening any time soon given this backdrop, and expect a higher terminal rate than markets do. The unveiling of the UK government’s fiscal plan on Thursday could also garner some attention. Euro No news of any importance out of the Eurozone last week left the euro to trade mostly off events taking place elsewhere, notably the US inflation report. That said, we did get a handful of ECB member speeches, which mostly struck a hawkish tone, suggesting that there will be no let up in rate hikes just yet. Further news suggesting that China may ease COVID restrictions, which would stoke appetite for European exports there, also buoyed the common currency to a near 4% rise against the dollar. We still see market pricing for European terminal rates way too low and out of touch with economic reality and the relentless rise in inflation. Lagarde has two opportunities to jawbone these rates higher, one of Wednesday and another Friday. There will be little else to move markets in the Eurozone this week. US dollar One swallow does not a summer make, but the October inflation report was good news and was justly celebrated by markets as such. Goods prices came in lower than expected and drove both the core and headline numbers down from the previous month. The headline number has now been falling for some months, and while the more important core index is not yet falling, neither is it rising. Figure 3: US Inflation Rate (2012 – 2022) Source: Refinitiv Datastream Date: 14/11/2022 This week will be light in terms of data out of the US, but we will be getting a surfeit of Fed speeches, no fewer than seven in all. Markets will eagerly read them for hints on the impact of last week’s inflation report on Fed expectations for the December hike and the terminal Fed Funds rate. Japanese yen We’ve seen a quite remarkable reversal of fortune for the yen in the past few weeks. The yen was the best performer in the G10 last week, ending it around 6% higher on the dollar – the largest one-week move in the USD/JPY pair since 1998. While most of the rally was driven by broad weakness in the US dollar, the already suppressed valuation of the yen provided room for an outperformance. A possible dovish pivot from the Federal Reserve is also disproportionately bullish for JPY, given that the Bank of Japan is the only central bank in the G10 not to be engaging in a tightening cycle of its own. Attention this week may turn to macroeconomic news, with a number of data releases on tap. We will be paying close attention to the Q3 GDP print (Monday), trade data (Wednesday) and inflation report (Thursday). Swiss franc The Swiss franc was one of the best-performing G10 currencies last week, rallying on Friday after hawkish remarks from SNB chairman Thomas Jordan. Jordan stated that the bank is ready to take ‘all measures necessary’ to achieve price stability. Moreover he said that current monetary policy settings are ‘not sufficiently restrictive’ in order to bring inflation back towards the central bank’s target. He also confirmed that the bank remained able to sell its FX reserves as part of its policy efforts. Jordan’s hawkish rhetoric all but guarantees another interest rate hike in December, although the size of the move is more of an open question. At present, we’re leaning towards another 50 basis point hike. In the coming days, we’ll continue to focus on additional communications from the SNB, with a handful of speeches from officials scheduled this week. Aussie Signs of an easing in the Chinese government’s stance towards ‘zero-covid’ provided an element of assistance for the Australian dollar last week, though the extent of the move higher in the AUD/USD pair was still driven almost entirely by the soft US inflation print. As one of the higher-risk currencies in the G10, AUD should have been near the top of the performance tracker, though the recent dovish shift from the Reserve Bank of Australia means that the currency would receive less support from a narrowing in US rate differentials. Deputy governor Bullock reaffirmed this stance last week, noting that the bank was nearing the point where it could pause the hike cycle. We don’t necessarily expect this week’s RBA meeting minutes (Tuesday) to rock the boat, as expectations for anything other than 25bp hikes going forward are very low. The October labour report on Thursday may prove more of a market mover. Economists expect a solid rebound in job creation following the weak September data (+15k consensus), which would likely support the case for additional modest tightening in RBA monetary policy. New Zealand dollar The New Zealand dollar underperformed its antipodean G10 counterpart last week, which we can only really ascribe to the recent strong rally in the kiwi that left it trading at a near seven-month high on the Aussie dollar. There wasn’t too much domestic news to report last week, though the latest manufacturing PMI did raise a few alarm bells over the state of the New Zealand economy. The October index fell below the critical level of 50, separating expansion from contraction, for the first time since August 2021. Q3 producer price inflation data will be released on Thursday in another otherwise quiet week. The key for the New Zealand dollar in the coming days will continue to be market expectations for the next RBNZ meeting on 23rd November. Investors remain torn between a 50bp and 75bp rate hike, and will be looking for news in the interim that may support either argument. Canadian dollar CAD continues to trade in much closer lockstep with the US dollar than any other currency in the G10, outperforming during periods of USD strength, and underperforming when the greenback deprecates. This was very much evident last week as, aside from the USD, the Canadian dollar ended at the bottom of the pack among the major currencies. Remarks from Bank of Canada governor Macklem were largely ignored on Thursday. Macklem said that more rate hikes were on the way, while warning that a recession and an increase in layoffs may be a price to pay for bringing down inflation. This week will be all about Wednesday’s inflation report. Economists are pencilling in an easing the headline number to 6.9% (from 7%), but an increase in core inflation to 6.3% (from 6%). An acceleration in the latter could bring another 50bp hike into view at the December BoC meeting, which would be bullish for CAD. At the time of writing, markets only see around a one-in-four possibility of such a move. Swedish krona As one of the higher-risk currencies in the G10, the improvement in investor appetite for risk, due to the relaxation of some of the restrictions to curb covid in China and expectations of a more dovish Federal Reserve, benefited the Swedish krona disproportionally last week. As a consequence, SEK rose by around 1.5% against the euro and 5% against the dollar. The focus this week will return to inflation, with the October CPI and CPIF reports set to be released on Tuesday. While the former is expected to continue on its upward trend, the latter (the Riksbank’s preferred measure of inflation), is projected to ease from September’s thirty-year high. Any surprises to the upside in either, notably the CPIF report, could heap additional pressure on the Riksbank to continue raising interest rates aggressively, just ahead of its November meeting next week. Norwegian krone The Norwegian krone ended last week almost unchanged against the euro, but in line with other risk assets, it appreciated strongly against the dollar. Inflation data continues to be one of the main drivers in FX markets. Norway’s October inflation data was released last week, and unlike in the US, it again surprised to the upside. Headline inflation rose sharply to 7.5% in October, from 6.9% in September, and above market expectation (7.1%) – its highest rate in 35 years. The core inflation rate, arguably of even greater importance, also broke to a new record high 5.9%. Figure 4: Norway Inflation Rate (2013 – 2022) Source: Refinitiv Datastream Date: 14/11/2022 The lack of a peak in domestic price pressures will provide a big headache for policymakers at Norges Bank, which may now have to raise rates higher and deeper into next year than currently expected, which could support the krone. Third quarter GDP data will be released on Friday. We will be paying special attention to this print, as Norges bank’s dovish pivot was due to risks to growth. Chinese yuan The Chinese yuan has managed to rally against the US dollar in the past few days, rising to its strongest position since September. US inflation news has certainly helped, as the expected gap between US and Chinese monetary policy has narrowed. An easing of some of the country’s covid restrictions on Friday, including a shortening of quarantine periods and a reduction in contract-tracing efforts, have further supported the yuan. The above changes mark a significant shift in China’s approach towards the pandemic, and have raised hopes that the economy will have more breathing room as the country continues its efforts to combat the virus. That said, these steps are small ones, and authorities have emphasised that zero-Covid remains in place. Infections in China are on the rise and Beijing and a number of other key cities have seen record numbers of new cases in the past few days. In addition to covid, we’ll focus on headlines from the Biden-Xi meeting in Bali today and hard data releases, out on Tuesday. The PBoC will also set the MLF rate that day, albeit no change in rates is expected, even with inflation surprising to the downside last week (2.1% in October). Economic Calendar (14/11/2022 – 18/11/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk   Read the article on Ebury
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Crude Oil Price Dynamics Can Affect The UDS/CAD Pair

TeleTrade Comments TeleTrade Comments 15.11.2022 09:09
USDCAD comes under some renewed selling pressure on Tuesday amid modest USD weakness. Bearish crude oil prices might undermine the Loonie and help limit the downside for the major. Investors now look to the US macro data and speeches by FOMC members for a fresh impetus. The USDCAD pair struggles to capitalize on the previous day's bounce from the 100-day SMA support and meets with a fresh supply near the 1.3325 area on Tuesday. The pair maintains its offered tone through the early European session and is currently placed near the daily low, around the 1.3285-1.3280 region. The US Dollar comes under some renewed selling pressure amid rising bets for a less aggressive policy tightening by the Fed. In fact, Fed fund futures are now pricing in a 91% chance of a 50 bps rate hike at the next FOMC meeting in December. This, along with a generally positive tone around the equity markets, is seen as another factor weighing on the safe-haven buck and exerting some downward pressure on the USDCAD pair. The downside, however, seems cushioned in the wake of a mildly negative sentiment surrounding crude oil prices. Rising COVID-19 cases in China raise concerns about lower fuel consumption in the world's top crude oil importer. This comes after OPEC lowered its 2022 global demand forecast and continues to act as a headwind for the black liquid, which might undermine the commodity-linked Loonie and lend support to the USDCAD pair. The mixed fundamental backdrop warrants some caution for aggressive traders and positioning for a firm near-term direction. Traders now look to the US macro data - the Empire State Manufacturing Index and Producer Price Index (PPI). This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand. Apart from this, oil price dynamics should provide a fresh impetus to the USDCAD pair.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair's Moves May Have Challenges

TeleTrade Comments TeleTrade Comments 16.11.2022 09:10
USDCAD fades bounce off 100-DMA, mildly offered of late. Improvement in market sentiment pushes back US Dollar buyers. Fears of softer demand weigh on oil prices ahead of EIA inventories. Risk catalysts should also be watched closely amid the recent swings in risk appetite. USDCAD struggles to defend buyers around 1.3270-80 heading into Wednesday’s European session, despite bouncing off the previous day. In doing so, the Loonie pair portrays the trader’s anxiety ahead of the key data from the US and Canada. Also likely to have challenged the USDCAD moves are the latest moves in the sentiment. Late on Tuesday, the news that two Russian-made rockets were fired at Poland and killed two people triggered the risk-off mood. The same triggered emergency meetings of the North Atlantic Treaty Organization (NATO) and the Group of Seven (G7), which in turn favored the US Dollar (USD) due to its safe-haven appeal. However, the latest news shared by the Associated Press (AP) quoted an anonymous US official’s findings while mentioning that the missile may have been fired by Ukraine. As a result, the risk aversion ebbed and the greenback reversed the early-day gains. Elsewhere, market forecasts of upbeat US data and the Bank of Canada’s (BOC) bearish bias seem to keep the USDCAD buyers hopeful. On Tuesday, US Producer Price Index (PPI) for October eased to 8.0% YoY versus market forecasts of 8.3% and the downwardly revised prior of 8.4%. It’s worth noting that the monthly figure reprinted the 0.2% prior (revised from 0.4%) while easing below 0.5% expectations. Moreover, the Federal Reserve Bank of New York's Empire State Manufacturing Index jumped to 4.5 in November from -9.1 in October and the market expectation of -5. It should be noted that the US Retail Sales for October is expected to post 1.0% growth versus 0.0% prior. On a different page, Bank of Canada (BOC) Governor Tiff Macklem raised concerns over the effect of the rapid increases in interest rates on Monday, which in turn suggests easy rate hikes moving forward. In late October, the BOC surprised markets by announcing 0.50% rate hike versus 0.75% expected. Talking about the oil prices, the WTI crude oil drops 0.60% intraday to $85.65 by the press time amid fears of lower demand, raised by the OPEC earlier in the week. In doing so, the black gold fails to justify the latest weakness in the US Dollar, as well as the decline in the API Weekly Crude Oil Stock to 5.835M for the week ended on November 11 versus 5.618M prior. Moving on, Canada’s Consumer Price Index (CPI) and the US Retail Sales will be crucial to watch for the USDCAD traders and can provide a corrective bounce from the key DMA support in case of matching market forecasts. Also important to watch is the weekly print of the EIA Crude Oil Stocks Change. Technical analysis USDCAD leans bearish between a one-week-old resistance line and the 100-DMA, respectively around 1.3370 and 1.3240.
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

USD/CAD: Bank of Canada is expected to hike the interest rate by 50bp

Kenny Fisher Kenny Fisher 16.11.2022 17:29
The Canadian dollar has edged lower on Wednesday, trading at 1.3254, down 0.18%. Canadian dollar eyes inflation The Canadian dollar has performed well in the month of November, with gains of 2.7%. The unexpectedly soft inflation report out of the US ignited risk appetite, sending equities soaring and the US dollar sharply lower. USD/CAD is having a quiet day, but that could change in the North American session, with the release of Canada’s October inflation report. The markets are bracing for a spike in inflation, with an estimate of 0.7% MoM, compared to 0.1% in September. Inflation hit 6.9% in September, a slight drop from 7.0% in August. The markets are expecting another 6.9% gain for October, and an unexpected reading could trigger some volatility from USD/CAD. The Bank of Canada has tightened rates to 3.75%, which is a very aggressive rate-tightening cycle. The markets are expecting another 0.50% increase in December, and BOC Governor Macklem has borrowed the Fed script, saying that more rate hikes are needed in order to curb inflation. Like the Fed, Macklem has left open the possibility of reducing the pace of rate hikes in order to guide the economy to a soft landing and avoid a recession. A major concern for the BoC is that inflation expectations remain high, which risks triggering a wage-price spiral that would result in inflation climbing higher. A soft inflation report today would go a long way in assuaging the BoC’s concerns over inflation and inflation expectations. The Fed is doing its best to dampen speculation that it plans to pivot in its rate policy and that the rate-hike cycle is almost completed. Fed policy makers have sounded hawkish since the inflation report sent the markets into a tizzy, as any dovish signals could hurt the Fed’s battle with high inflation. The Fed’s message remains that the fight with inflation is not over and even though there could be an easing of the pace of hikes next month, the Fed expects a higher terminal rate than it did in September. USD/CAD Technical USD/CAD faces resistance at 1.3353 and 1.3471 There is support at 1.3218 and 1.3136 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steady ahead of inflation - MarketPulseMarketPulse
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The USD/CAD Pair Has Witnessed A Decent Buying Interest

TeleTrade Comments TeleTrade Comments 17.11.2022 09:08
A rebound in the risk-off market mood has strengthened the Greenback bulls. A usual test of the breakout region of the accumulation phase will offer a bargain buy to the market participants. Advancing 20-EMA adds to the upside filters. The USDCAD pair has shifted its auction profile above the critical hurdle of 1.3350 in the early European session. The asset has witnessed a decent buying interest as investors have turned cautious amid escalating geopolitical tensions between North Korea and the US. The major has refreshed it's weekly high above 1.3360 led by a steep fall in oil prices. The US dollar index (DXY) has witnessed marginal selling pressure while struggling to cross the critical hurdle of 106.60. While the S&P500 futures have shown some recovery after easing entire gains recorded in early Asia. On an hourly scale, the asset has delivered a breakout of the accumulation phase that signals the transfer of inventory from retail participants to institutional investors. A usual test of the breakout region around 1.3336 would be an optimal opportunity for investors to initiate longs. The 20-period Exponential Moving Average (EMA) at 1.3325 is advancing, which adds to the upside filters. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that upside momentum has been activated. Should the asset corrects marginally to near the breakout region around 1.3336, investors will consider this a bargain buy and will initiate fresh longs. This will drive the asset towards November 8 low at 1.3387, followed by November 10 high at 1.3571. On the contrary, the Loonie bulls could regain control if the asset drops below the round-level support of 1.3300, which will drag the asset towards Wednesday’s low at 1.3246 and September 1 high around 1.3200. USDCAD hourly chart  
The USD/CAD Pair Has The Strong Downside Momentum

Pound sterling gains on the back of soaring UK inflation rate which teases next BoE rate hikes

Jing Ren Jing Ren 17.11.2022 08:26
GBPUSD keeps high ground Sterling rallies as red hot inflation in the UK calls for more interest rate hikes by the BoE. A break above September’s high of 1.1740 has prompted some bears to cover their positions, easing the downward pressure from the daily chart’s perspective. A brief pause above this resistance-turned-support suggests that there is still juice in the recovery. August’s double top at 1.2250 would be next should the rebound pick up speed past 1.2000. 1.1500 near the origin of a bullish breakout is a key demand zone. USDCAD attempts to rebound The Canadian dollar slid as October’s inflation fell short of expectations. A dip below 1.3240 indicates a lack of demand for the US counterpart. The greenback may continue to lose ground as traders stay on the sidelines for fear of catching a falling knife. 1.3150 is the immediate level to see whether it could trigger a buy-the-dips behaviour. Failing that, the psychological level of 1.3000 would be on the line. For those looking to buy, 1.3440 is the first hurdle to clear and the pair may only regain a foothold once above 1.3640. USOIL falls lower WTI crude remains feeble amid rising COVID-19 cases in China. The price is in a horizontal consolidation between 82.00 and 93.50, but the downward pressure is still omnipresent following a double top at the upper band. Two consecutive falls below 88.00 and 85.00 have put the bulls on the defensive. As the latest rebound stalled at the psychological level of 90.00, the commodity could be vulnerable to a new round of sell-off. A drop below 82.00 might attract momentum sellers and push the price towards 77.00.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

G10 Forex Market in 2023 To Be Characterised By More Volatility

ING Economics ING Economics 20.11.2022 11:30
After an 18-month bull trend in the dollar, the FX outlook has become less clear. Further position adjustment could prompt a little more short-term dollar weakness, but we do not believe the conditions are in place for a major dollar bear trend just yet. Instead, we expect FX markets in 2023 to be characterised by less trend and more volatility. Source: Shutterstock G10: Less trend, more volatility The final quarter of 2022 has seen a breakdown in the otherwise orderly dollar bull trend – a trend which had been worth 5% per quarter over the first nine months of the year. That dollar rally had largely been driven by a Federal Reserve wanting to take policy into restrictive territory – a trend only exacerbated by the war in Ukraine. For all the current discussions about peak dollar and peak macro pessimism, we think it is still worth examining whether the conditions will be in place to deliver an orderly dollar bear trend in 2023. We think not and here are three reasons why: Driving the dollar bull trend since summer 2021 has been a Fed at first abandoning Average Inflation Targeting and then trying to get ahead of the inflation surge. A call on a benign dollar decline in 2023 requires the Fed to be taking a back seat. That seems unlikely. The stark message from both the Fed’s Jackson Hole symposium and the IMF autumn meetings was that central banks should avoid relaxing too early in their inflation battle – a move which would deliver the pain of recession without any of the sustained gains on inflation. We suspect it will be too early for the Fed to sound relaxed at its 14 December meeting and March 2023 may be the first opportunity for a decisive turn in Fed rhetoric. While a softer Fed profile may be a necessary condition for a turn in the dollar, a sufficient condition requires a global economic environment attractive enough to draw funds out of the dollar. 2023 global growth forecasts are still being cut – dragged lower especially by recession in Europe. ING forecasts merchandise world trade growth below 2% in 2023 – not a particularly attractive story for the trade-sensitive currencies in Europe and emerging markets. A liquidity premium will be required of non-dollar currencies. 2023 will be a year when central banks are initially still hiking into a recession and shrinking balance sheets. The Fed will reduce its balance sheet by a further $1.1tn in 2023 and the European Central Bank will be looking at quantitative tightening, too. Lower excess reserves will tighten liquidity conditions still further and raise FX volatility levels. Again, the bar not to invest in dollar deposits remains high – especially when those dollar deposits start to pay 5% and the dollar retains its crown as the most liquid currency on the planet. What do these trends mean for G10 FX markets? This probably means that the dollar can bounce around near the highs rather than embark on a clean bear trend in 2023. If the dollar is to turn substantially lower, we would favour the defensive currencies such as the Japanese yen and Swiss franc outperforming. Here, the positive correlation between bonds and equity markets may well break down via the bond market rallying on the back of a US recession and easier Fed policy. ING forecasts US 10-year Treasury yields ending 2023 at 2.75% - USD/JPY could be trading at 130 under that scenario.  Recession in Europe means that EUR/USD could be trading in a 0.95-1.05 range for most of the year, where fears of another energy crisis in the winter of 2023 and uncertainty in Ukraine will hold the euro back. Sterling should also stay fragile as the new government attempts to restore fiscal credibility with Austerity 2.0. We cannot see sterling being rewarded much more on austerity and suspect that GBP/USD struggles to hold gains over 1.20.  Elsewhere in Europe, some differentiation could emerge between the Scandinavian currencies. The Swedish krona may struggle to enter a sustained uptrend next year given its elevated exposure to the eurozone’s growth story, while the Norwegian krone could benefit from its attractive commodity exposure. However, NOK is an illiquid and more volatile currency, and would therefore face a bigger downside in a risk-off scenario. As shown in the chart below, commodity currencies look undervalued versus the dollar on a fundamental basis. However, a stabilisation in risk sentiment is a necessary condition to close the misvaluation gap. For the Australian and New Zealand dollars, an improvement in China’s medium-term outlook is also essential, so the Canadian dollar may emerge as a more attractive pro-cyclical bet given low exposure to the economic woes of Europe and China. Another factor to consider is the depth of the forthcoming house price contraction. We think central banks will increasingly take this into consideration and will try to avert an uncontrolled fall in the housing sector. However, this is potentially a very sizeable downside risk, especially for the currencies of commodity-exporting countries, which generally display the most overvalued property markets in the G10. To conclude, we think FX trends will become less clear in 2023 and volatility will continue to rise. FX option volatility may seem expensive relative to historical levels, but not at all when compared to the volatility FX pairs are actually delivering. We suspect risk management through FX options may become even more popular in 2023.   Valuation, volatility and liquidity in G10 Source: ING, Refinitiv EUR/USD: Dollar bromance will take some breaking   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/USD 1.035 Bearish 0.98 0.95 0.98 1.00 1.00 Bullish leap of faith is too dangerous: We are bearish on EUR/USD into the end of the first quarter of 2023. Key factors which have driven EUR/USD lower this year will remain largely in place. The softish US October CPI print may give the Fed some pause for thought, but should not be enough to derail it from some further tightening – taking the policy rate close to 5.00% in the first quarter of 2023. Another key factor for EUR/USD this year has been energy. Here, our team sees prices for both natural gas and oil rising from current levels through 2023. A difficult 2023 European winter for energy may well restrain the EUR/USD recovery later in the year, continuing to depress the eurozone’s traditionally large current account surplus.   Necessary but not sufficient: Tighter Fed policy has been at the forefront of this year’s dollar rally and a shift in the Fed tone (more likely in March 2023 than December 2022) will be necessary to see the short end of the US yield curve soften appreciably and the dollar weaken. But the sufficient condition for a EUR/USD turnaround is the state of affairs amongst trading partners. Are they attractive enough to draw funds away from USD cash deposits potentially paying 5%? That is a high bar and why we would favour the EUR/USD 2023 recovery being very modest, rather than the ‘V’ shape some are talking about. ECB will blink first: The case for a central bank pivot is stronger for the ECB than the Fed. The German economy looks set to contract 1.5% next year and at its 15 December meeting, the ECB may well use its 2025 forecast round to show inflation back on target. We see the ECB tightening cycle stalling at 2.25% in February versus the near 3% currently priced by the market for 2023. This all assumes a seamless ECB introduction of quantitative tightening and one that does not upset peripheral bond markets. Add in global merchandise trade barely growing above 1% next year (recall how the 2017-19 trade wars weighed on the euro) plus the risk of tighter liquidity spilling into financial stability – all suggest the market’s bromance with the dollar will continue for a while yet.  USD/JPY: 1Q23 will be a crucial quarter   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/JPY 140.00 Bearish 145.00 145.00 140.00 135.00 130.00 Clash of the titans: The stark divergence in monetary policy between the Fed and the Bank of Japan has been the primary driver of this year’s 15%+ rally in USD/JPY. In 2023, investors may question whether the BoJ is ready to tighten. The default view is that the perma-dovish BoJ Governor, Haruhiko Kuroda, will not be moved. However, the end of Governor Kuroda’s term on 8 April 2023 will no doubt lead to frenzied speculation on his replacement and whether a less dovish candidate emerges. Interest rate markets are starting to price a change – e.g. the BoJ’s 10-year target sovereign yield of 0.25% is priced at 0.50% in six months’ time. March 2023 will be especially volatile: The first quarter of 2023 will also see huge focus on the Japanese wage round, where a rise in wages is a prerequisite for the BoJ to tighten policy. Japanese politicians have been encouraging business leaders to raise wages, while at the same time, the government has been quite aggressive with fiscal stimulus to offset the cost-of-living shock. This period will also see the Fed release its dot plots (22 March), which may be the first real chance for the Fed to acknowledge a turn in the inflation profile. As such, this period (March/April) could see a big reversal lower in USD/JPY. FX Intervention slows the move: Most agree that USD/JPY is higher for good reasons (including the energy crisis) and that Japanese FX intervention can only slow, not reverse the move. The Japanese have already spent around $70bn in FX intervention between the 146 and 151 region in USD/JPY and will likely be called into further action based on our view of a stronger dollar over coming months. FX reserves are not limitless, of course, but Japan’s large stockpile of $1.1tn means that this campaign can continue for several more months. The purpose here is to buy time before the Fed cycle turns. Unless we end up with 6%+ policy rates in the US next year, we would expect USD/JPY to be ending 2023 nearer 130. GBP/USD: Running repairs   Spot Year ahead bias4Q221Q232Q233Q234Q23 GBP/USD 1.19 Mildly Bearish 1.10 1.07 1.11 1.14 1.14 Fiscal rescue plan: After September’s government-inflicted flash crash, GBP/USD is now recovering on the expectation of more credible UK fiscal plans and the softer dollar. As above, we doubt 2023 will prove the year of a benign dollar decline. And the risk is that the Fed keeps rates at elevated levels for longer. Given sterling’s large current account deficit and its transition to high beta on the external environment, we think it is too early to be expecting a sustained recovery here. Instead, we favour a return to the 1.10 area into year-end as the government introduces Austerity 2.0 and the Bank of England cycle is repriced lower. Tighter fiscal/looser monetary mix: At its meeting in early November, the BoE pushed back against the market pricing of the rate cycle – arguing that hikes close to 5% would see the UK economy contract 5%. Our call is that the BoE terminal rate will be closer to the 3.75% area than the 4.50% that the market prices today. As the BoE assesses the degree of tightening needed to curtail inflation, the government is discussing ways to fill around a £60bn hole in the budget. The plan will be revealed on 17 November, probably in a roughly 50:50 split between tax hikes and real terms spending cuts. We look for the UK economy to contract every quarter in 2023 – making it a very difficult environment for sterling. Sterling suffers from liquidity outages: This year’s BIS triennial FX survey saw sterling retain its position as the fourth most traded currency pair. Despite this, sterling does occasionally suffer from flash crashes. We think liquidity will be at a premium in 2023 and that a Fed taking real rates even higher as economies head into recession is a dangerous combination for sterling – where financial services make up a large section of the economy. GBP/USD realised volatility is now back to levels seen during Brexit and our market call for 2023 is that these types of levels will become more, not less, common. EUR/JPY: A turn in the cycle   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/JPY 144.50 Bearish 142.00 138.00 137.00 135.00 130.00 Downside risks into 1Q23: EUR/JPY has defied typical relationships with risk assets by gently rallying all year even as both bond and equity benchmarks sold off 20%. Driving that JPY underperformance has probably been BoJ policy and USD/JPY’s strong relationship with US 10-year yields. Both the eurozone and Japan have been hit by the energy shock, where external surpluses have quickly dwindled. As above, we tend to think there are downside risks to EUR/JPY in the first quarter of 2023 as speculation mounts over BoJ Kuroda's successor as well as the ECB potentially calling time on their tightening cycle at the February meeting. US10yr can drag EUR/JPY to 130 in 2H23: A large part of the JPY underperformance during 2022 has been driven by developments in the US bond market. USD/JPY consistently shows the most positive correlation to US 10-year Treasury yields of any of the G10 FX pairs – and far higher than EUR/USD. Consistent with ING’s view on the Fed cutting rates in the third quarter of 2023, our debt strategy team sees US 10-year yields starting to edge lower in the second quarter of 2023, and then falling 100bp in the second half of 2023. In theory, this should heavily pressure EUR/JPY into the end of the year. Financial stability risks increase: Lower growth and tighter liquidity conditions – at least through the early part of 2023 – increase the prospect of financial stability risks. Recall the Fed will be shrinking its balance sheet by $1.1tn in 2023 even as liquidity and bid-offer spreads continue to create difficult market conditions. The yen lost its shine as a safe-haven currency in 2022, but we suspect relative to the euro, some of that shine can be regained in a softer US rate environment. The EUR/JPY cycle should also turn if the ECB calls time on its tightening cycle at the 2 February meeting. EUR/GBP: Listless in London   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/GBP 0.87 Neutral 0.89 0.89 0.88 0.88 0.88 In the same macro boat: Both the eurozone and UK economies have been hit hard by the war in Ukraine and the surge in energy prices. Both saw sharp terms of trade declines into August and then a sharp reversal as natural gas prices dipped into the warm winter. There is not a substantial amount of difference between our German and UK quarterly growth profiles for 2023 – both contracting every quarter of the year. Perhaps one could argue that the UK is more exposed to higher mortgage rates given the shorter duration of fixed-rate mortgages in the UK. This could all make for a trendless EUR/GBP environment. Energy price guarantees could differentiate: One important determinant for UK growth in 2023 will be how the new government handles the Energy Price Guarantee. Former UK Prime Minister, Liz Truss, offered a two-year programme – subsequently cut back to six months after the UK fiscal crisis. How the UK consumer copes with having to pay market prices for energy will be key to the UK story in 2023 as well as how the EU as a whole copes with similar challenges. Currently, it seems that the ECB is concerned that the fiscal programmes in Europe are too generous and not particularly targeted – adding to the inflation challenge.    Political wild cards: To pick out a few political wild cards, the first is a re-run of the Scottish independence referendum. The Scottish National Party (SNP) has picked 19 October 2023 as the date – although such an exercise would likely have to be approved by the UK parliament. Currently, the SNP is pursuing an action through the Supreme Court to see whether London can indeed still veto the referendum. In Europe, the focus will probably be on the fiscal path taken by the new right-wing Meloni government and also the reform of the Stability and Growth Pact. Budgets submitted in late 2023 could become an issue were the rules to be tightened again.   EUR/CHF: Swiss National Bank to guide it lower   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CHF 0.98 Bearish 0.95 0.93 0.90 0.90 0.92 Does the SNB want a stronger Swiss franc?: The Swiss National Bank this year said it made a conscious decision to allow nominal Swiss franc appreciation in light of the inflation environment. The three-month policy rate has been raised 125bp to 0.50% and the SNB says it wants to keep the real exchange rate stable. With inflation running at 3% in Switzerland versus 10% in its largest trading partner, the eurozone, the SNB in theory should be happy with something like 5-7% per annum nominal appreciation in the Swiss franc. That certainly was the story into the end of September but does not quite explain the Swiss franc's weakness over the last six weeks. Two-sided intervention: When hiking rates earlier this year the SNB also said it would be engaging in two-sided FX intervention. Ever since the start of the financial crisis in 2008, the SNB has been more familiar as a seller of the Swiss franc – including its 1.20 floor in 2011-2015. Now its strategy is changing and we read that as an objective to potentially manage the Swiss franc stronger in line with its ambitions to tighten monetary conditions. Earlier this year, we estimated that the SNB could possibly drive EUR/CHF to the 0.90 area in summer 2023 based on expected inflation differentials and the need for a stable real exchange rate. The risk environment should favour the franc: Central banks are communicating that they need to tighten rates into recession and remove the excess liquidity poured out during a series of monetary bailouts. Tighter monetary and financial conditions typically spell stormy waters for risk assets. With its still sizable current account surplus (worth 8% of GDP in the second quarter of 2022) the Swiss franc should perform well during this stage of the global economic cycle. Closer to home, the European economic cycle and the ECB discussing quantitative tightening into early 2023 will prove a challenge to peripheral eurozone debt markets and likely reinforce the franc as a eurozone hedge. EUR/NOK: Not for the faint of heart   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/NOK 10.33 Bearish 10.30 10.15 9.95 9.70 9.60 Risk sentiment remains key: The krone is not a currency for the faint of heart. It is the least liquid currency in the G10 space, making it considerably exposed to negative shifts in global risk sentiment and equity market turmoil. It is, at this stage, way too early to call for a turn in equities, and a hawkish Fed into the new year may actually mean more pain for risk assets, at least in the near term. A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat. Norges Bank policy: The krone’s underperformance in 2022 was exacerbated by Norges Bank effectively sterilising oil and gas profits via a large increase in daily NOK sales. In November, FX daily sales have been scaled back from NOK4.3bn to NOK3.7bn, and we think there could be some interest by NB to further ease the pressure on the currency via smaller FX sales. With recent dovish hints suggesting that the NB hiking cycle may peak at 3.0% (with most of the country on variable mortgage rates, many more rate hikes could be difficult to tolerate), allowing a stronger currency to do some inflation-fighting sounds reasonable.  Energy prices: If indeed markets enjoy a calmer environment in 2023 and NB favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway. There is probably an optimal range for oil and – above all – gas prices to trade at elevated levels but not such high levels that would significantly hit risk sentiment. For TTF, this could be somewhere around 150-200 €/MWh. This a plausible forecast for next year, but the margin for error can be very large. We see EUR/NOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely. EUR/SEK: Eurozone exposure a drag on SEK   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/SEK 10.80 Neutral 10.85 10.70 10.60 10.40 10.50 Riksbank’s policy: The Riksbank delivered more than one hawkish surprise in 2022, including a 100bp rate hike. This appeared to be part of a front-loading operation where lifting the krona was seen as a welcome side effect. In practice, and like in many other instances in the G10, the high volatility environment meant that short-term rate differentials played a negligible role in FX. So, despite a wide EUR-SEK negative rate differential throughout 2022, SEK was unable to draw any real benefit. That differential has now evaporated, but we expect 125bp of tightening (rates at 3.0%) in Sweden versus 75bp in the eurozone, which could suggest some EUR/SEK downside room in a more stable market environment. Also, a slowdown in FX purchases by the RB, now that reserves are back to the 1H19 levels, should remove some of the pressure on SEK. European picture: Sweden is a very open economy with more than half of its exports heading to other EU countries. Our expectations are that 2023 will see a rather pronounced eurozone recession and that the energy crisis will extend into the end of next year. Barring a prolonged period of low energy prices (and essentially an improvement in the geopolitical picture) in Europe, we doubt SEK will be able to enter a sustainable appreciation trend in 2023 as sentiment in the eurozone should remain depressed. Valuation: We are not fans of the euro in 2023, which means that our EUR-crosses forecasts reflect the weaker EUR profile. We see some room for EUR/SEK to move lower throughout the year – also considering that we estimate the pair to be around 9.0% overvalued. However, the high risk of a prolonged energy crisis in the eurozone means that SEK is significantly less attractive than other pro-cyclical currencies next year. Incidentally, SEK is highly correlated to the US tech stock market, which looks particularly vulnerable at the moment. A return to 10.00 or below would likely require a significant improvement in European sentiment. USD/CAD: Loonie is an attractive pro-cyclical bet   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CAD 1.33 Bearish 1.34 1.32 1.30 1.26 1.24 Commodities and external factors: Our commodities team expects Brent to average slightly above $100/bbl next year, and Western Canadian Select around $85/bbl. Along with our expectations for higher gas prices, the overall commodity picture should prove rather supportive for the Canadian dollar in 2023. In our base-case scenario, where global risk sentiment gradually recovers but two major risk-off forces – Ukraine/Europe and China – remain, CAD would be in an advantageous position, since Canada has much more limited direct exposure to China and Europe compared to other commodity-exporting economies.  Domestic economy: If the US proves to be a relative 'safe-haven' in the global recession, therefore withstanding the downturn better than other major economies like the eurozone, this should offer a shield to Canada’s economy, which is heavily reliant on exports to the US. There is probably one major concern for the domestic economy: house prices. Canada is among the most vulnerable housing markets in the world, with price-to-income ratios around 9x in many cities (compared to 5-6x in the US). Whether we’ll see a sizeable but controlled descent or a fully-fledged housing crash will depend on the Bank of Canada and the depth of the recession. Monetary policy and valuation: It does appear that the BoC has started to consider domestic warning signals (probably, also house prices), and recently shifted to a more moderate pace of tightening. Markets are currently expecting rates to peak around 4.25/4.50% in Canada, and we tend to agree. Barring a rapid acceleration in the unemployment rate, a housing crash should be averted. It is also likely that the BoC will start cutting before the Fed in 2023. All in all, accepting the downside risks stemming from the housing market and/or a further deterioration in risk sentiment, we see room for a descent in USD/CAD to the 1.25 level towards the end of 2023. In our BEER model, CAD is around 20% undervalued in real terms. AUD/USD: Riding Beijing’s roller coaster   Spot Year ahead bias4Q221Q232Q233Q234Q23 AUD/USD 0.68 Mildly Bullish 0.66 0.66 0.68 0.69 0.70 Exposure to China: The Australian dollar is a high-beta currency, and the direction of global risk sentiment will be the key driver next year. We think that a gradual recovery in sentiment will be accompanied by a still challenging energy picture, which may force investors to choose which pro-cyclical currencies to bet on. When it comes to AUD, the China factor will remain very central, as Australia has the most China-dependent export machine in the G10. Our economics team’s baseline scenario is that the real estate crisis will be the main drag on growth in China and while retail should recover on looser Covid rules, slowing global demand should hit exports. One positive development: the new Australian government is seeking a more friendly relationship with Beijing, paving the way for the removal of export curbs next year. Commodities and growth: Iron ore remains Australia’s main export (estimated at $130bn in 2022), and it is a very sensitive commodity to China's real estate sector. Our commodities team thinks a return to $100+ levels is unlikely given the worsening Chinese demand picture, but still forecasts prices to average $90/t in 2023. The second and third largest exports are oil and natural gas ($100bn combined). Here, we see clearly more upside room for prices, especially on the natural gas side. On balance, we expect the commodity picture for Australia to be rather constructive next year, which could offer a buffer to the Australian economy during the downturn. Growth in 2022 should have topped the 4% mark, but that will be much harder to achieve in 2023. The combination of higher rates, reset mortgages, a slowing housing market and possibly softening labour market should bring growth back closer to 3%. This would still be an extremely strong outcome against the backdrop of global weakness.   Monetary policy and valuation: The Reserve Bank of Australia has been one of the 'pioneers' of the dovish pivot, and a return to 50bp increases seems unlikely, as the Bank is probably monitoring the rather overvalued housing market, and the inflation picture is less concerning than in the US or in Europe. Most Australian households have short-term fixed mortgage rates, and we could see a deterioration in disposable income (especially at the start of the year). We think the RBA will be careful to avert an excessively sharp housing contraction, and we expect rates to peak at 3.60% (well below the Fed and the Reserve Bank of New Zealand) and cuts from 3Q23. This would mean a less attractive carry – and less upside risk in an optimistic scenario for global sentiment; but also less damage to the economy, which may play in AUD’s favour in our baseline scenario. Valuation highly favours AUD, as the positive terms of trade shock means that AUD/USD is 20% undervalued in real terms, according to our behavioural equilibrium exchange rate (BEER) model. We have a moderately upward-sloping profile for the pair in 2023, but high sensitivity to risk sentiment and China suggests downside risks remain high. NZD/USD: Dodging the housing bullet   Spot Year ahead bias4Q221Q232Q233Q234Q23 NZD/USD 0.62 Mildly Bullish 0.60 0.60 0.62 0.63 0.64 Monetary policy: The Reserve Bank of New Zealand has given very few reasons to believe it is approaching a dovish pivot. Markets are currently expecting the Bank to hike well into 2023, and take rates to around 5.0%. While inflation (7.2% year-on-year) and job market tightness (unemployment at 3.3%) both remained elevated in the third quarter, there are growing concerns about the rapid downturn in the New Zealand property market, which in our view will trigger either an earlier-than-expected end to the tightening cycle or a faster pace of rate cuts in 2023. Housing troubles: The RBNZ recently published its financial stability report, where it showed relatively limited concern about households’ ability to withstand the forthcoming downturn in house prices. In its August 2022 forecasts, the RBNZ estimated that the YoY contraction in house prices will reach 11.6% in the first quarter of 2023. However, that implied an Official Cash Rate at 4.0%, so only 50bp of extra tightening from now, which seems too conservative now. House prices have fallen 7.5% from their first quarter 2022 peak so far, but the trend may well accelerate, especially given a hawkish RBNZ and the risk of slowing global demand hitting the very open New Zealand economy. External drivers and valuation: Even assuming a constructive domestic picture in the housing market and an attractive yield for the currency in 2023, external factors will determine how much NZD can draw any benefit. As for AUD, risk sentiment and China are the two central themes. The New Zealand dollar is more exposed to risk sentiment (as it is less liquid and higher-yielding) than AUD, but probably less exposed to China’s story. In particular, the real estate troubles in China may well hit Australia via the iron ore channel, while NZ exports (primarily dairy products) are much more linked to China’s Covid restrictions, which look likely to be gradually scaled back. In our base case, the two currencies should largely move in tandem next year. The real NZD/USD rate is 15% undervalued, according to our BEER model. EUR/DKK: Tricky mix of intervention and rates   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/DKK 7.44 Neutral 7.44 7.44 7.44 7.44 7.45 Central bank policy: Danmarks Nationalbank delivered FX intervention worth DKK45bn in September and October to defend the EUR/DKK peg. On 27 October, it opted for a smaller rate hike (60bp) compared to the ECB (75bp), which briefly sent EUR/DKK close to the 7.4460 February highs before rapidly falling back to 7.4380/90. We think it will be a busy year ahead for the central bank, as we expect very limited idiosyncratic EUR strength and potentially more pressure on EUR/DKK. Having now exited negative rate territory, DN has much more room to adjust the policy rate for a wider rate differential with the ECB if needed. However, with inflation running above 10% in Denmark, DN may prefer FX intervention over dovish monetary policy to support the peg. We have recently revised our EUR/DKK forecast, and expect a return to 7.4600 only in 2024. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

Sharp Statements Of Fed Members Dampened Investors' Enthusiasm

InstaForex Analysis InstaForex Analysis 21.11.2022 09:00
The week ended with mixed dynamics, mainly due to increased volatility and uncertainty of future levels of interest rate hikes. After the US released its latest data on inflation, stocks rallied strongly, while Treasury yields and dollar fell. It seems that the harsh statements of some Fed representatives cooled down the ardor of investors and returned to the markets the increased degrees of uncertainty. St. Louis Fed President James Bullard and San Francisco Fed chief Mary Daly actually made it clear with their statements that the latest inflation data may not be an important factor in the central bank's decision to not only end the cycle of rising rates, but also slow its pace. While Daly noted that she expects the discount rate to rise to 5.25%, Bullard agreed that the overall rate level could be between 5% and 7%. These words show that the stance of some Fed members remain hawkish, indicating that they believe it is too early to see the decline in US inflation as a serious signal for loosening the super-tight monetary course. This raises the possibility that another rate hike of 0.75% may be decided at the December meeting, although markets had hoped that the rate might be raised by as little as 0.50%. This is where the minutes from the bank's last meeting, which will be released this Wednesday, could play the most important role. If it shows that Daly and Bullard's position prevails, markets will see another wave of sell-offs, followed by the increase of Treasury yields and dollar. Market volatility will also be high, stimulated by uncertainty, which will be the reason of sideways trend. All this will take place during low market volumes caused by the release of the lates Fed minutes and Thanksgiving holiday in the US on November 24. Uncertainty will remain high until the Fed's future rate stance is clarified. Forecasts for today: GBP/USD The pair is trading at 1.1740-1.1965. It is likely to stay in this range today. USD/CAD The pair is rising amid falling crude oil prices and traders waiting for the release of the latest Fed minutes. Quotes are a little above 1.3400, and a consolidation will prompt a local growth to 1.3475. Relevance up to 07:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327618
The USD/CAD Pair Has The Strong Downside Momentum

Canadian dollar weakened as crude oil prices dropped last week. Ebury's Enrique Díaz-Álvarez talks comments on Forex market

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 22.11.2022 07:30
The dollar recovered somewhat from its recent drubbing on the back of a steady drumbeat of hawkish Federal Reserve speeches. Data out of the US and the Eurozone was very light last week, and what there was came out generally better than expected and reinforced the message that the main problem confronting major central banks is still inflation. Sterling was the star of the week, finishing near the top of the rankings on the back of strong inflation and employment data. Beyond G10, it was a tough week for Latin American currencies, which fell back amid weaker commodity prices and concerns about misguided fiscal policies.   With the US trading week shortened by the Thanksgiving holidays, the financial calendar will be dominated by the release of the PMI indices of business activity. We’ll be paying particularly close attention to those in the Eurozone and the UK. Consensus forecasts are gloomy, opening the possibility of a positive surprise. The calendar for central banker speeches is unusually busy this week, including several from the European Central Bank and no fewer than four from the Bank of England. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Bloomberg Date: 21/11/2022 GBP The labor report last week out of the UK supported our view that the UK recession will be short and shallow. Payrolls continue to increase at a healthy pace even while unemployment numbers are consistent with an economy at or perhaps above full employment, with no hint of job destruction as yet. Inflation soared more than expected in October, to 11.1%, its highest level since 1981. It would have been even higher if not for the government’s Energy Price Guarantee which capped household energy bills. Figure 2: UK Inflation (2013 – 2022) Source: Bloomberg Date: 21/11/2022 The Fiscal Statement contained aggressive deficit cuts, as expected, but for the most part, they were back loaded and should have little effect in the short and medium term. We think market expectations that the Bank of England can stop hiking rates well short of 5% are fanciful and expect the sterling to outperform as market consensus moves closer to our view. EUR Last week we had no macroeconomic or policy news of note out of the Eurozone, so the common currency was left to bounce around aimlessly to end near the middle of the rankings, nearly flat against the US dollar after its record rally the week prior. All eyes now turn to the PMI indices of business activity, perhaps the most reliable leading index there. Expectations are for another drop further into contractionary levels. Other sentiment indices have outperformed expectations, and the mood appears to be better than it was last month. A positive surprise there would go a long way to pushing the euro rally further. USD As in the Eurozone, economic data was mostly second tier last week, but what there was really belied the notion that the US economy is in recession. Retail sales blew out expectations growing 1.3% in the month of October. Meanwhile, producer inflation also took a turn lower, after the CPI did so the previous week. Figure 3: US Retail Sales [% MoM] (2017 – 2022) Source: Bloomberg Date: 21/11/2022 On Monday, the latest GDP figures showed that the Japanese economy contracted by 1.2% annualised in Q3 (+1.1% expected), though there was an upwards revision to the Q2 data. While this would vindicate the bank’s current stance, Thursday’s data showed that inflation rose to a new three decade high (3.7%). Whether this is enough to change the BoJ tune remains to be seen. We suspect that it won’t, although continued signs of an acceleration in domestic price pressures would likely pressure policymakers into at least considering a hawkish pivot. CHF The Swiss franc was among the underperformers last week, selling off by about 1% against the euro and the US dollar. Attention in Switzerland is increasingly turning towards the Swiss National Bank December meeting. Following his hawkish comments in the week previous, SNB chairman Thomas Jordan again suggested that further policy tightening may be required. Later in the week, SNB member Andrea Machler stated that the bank will indeed continue hiking if the forecast points to inflation above 2%. After a string of hawkish signals from the central bank, we have little doubt that these words will be followed by actions and another hike in December is all but certain. Meanwhile, declines in SNB sight deposits have been more limited in recent weeks, compared to the sharp drops witnessed in late-September and early-October. This suggests that the SNB has been less active in absorbing excess liquidity. In the coming days, our focus will be primarily on outside news, as Switzerland’s economic calendar is almost completely empty. AUD A rather quiet week by recent standards in global financial markets allowed for consolidation in the Aussie dollar last week. Somewhat surprisingly, we saw little reaction in AUD to last week’s rather strong October labour report. Another 32.2k net jobs were added in the Australian economy last month, all in full-time positions and well above expectations, while the unemployment rate also unexpectedly dropped back to 3.4%. Meanwhile, the RBA’s latest meeting minutes didn’t offer too many clues as to the direction of the bank’s next policy move, leaving the door open to both a pause in the hike cycle and larger hikes should data dictate. Figure 4: Employment Change in Australia [‘000] (2016 – 2022) Source: Bloomberg Date: 21/11/2022 We suspect that activity in AUD could pick up in the first half of this week. On Tuesday, the latest business activity PMIs will be released, which are expected to ease modestly from the previous month. A speech by RBA Governor Lowe (Tuesday) will also be closely watched. NZD One of the main event risks in the FX market this week will be Wednesday’s Reserve Bank of New Zealand meeting. This week’s meeting is a very difficult one to call, with markets torn between a 50bp and 75bp rate hike. On the one hand, the uncertainty of global growth and the recent downturn in the domestic housing market could elicit a more cautious response. On the other, however, New Zealand inflation remains far too high for comfort, the labour market is in good shape and indicators of economic activity are holding up reasonably well. On balance, we think that the RBNZ will deliver a jumbo 75bp rate hike, though it is a very tough call that could go either way. Markets are pricing in around 65bps of tightening, so a 75bp move would be bullish for the New Zealand dollar. Much will, of course, depend on the bank’s accompanying communications. We suspect that these will strike a hawkish note, stressing the need for additional hikes into 2023, and we see risks to NZD as skewed to the upside heading into the meeting. CAD A drop in global oil prices toward the end of last week weighed slightly on the Canadian dollar, though the currency managed to largely hold its own against the USD. Brent crude oil briefly dropped back below the $86 a barrel level on Friday, its lowest level since late-September, as investors feared weaker demand from China and continued increases in US rates following hawkish comments from Federal Reserve officials. There was actually very little major macroeconomic developments out of Canada last week, which partly contributed to the relative lack of volatility in the USD/CAD pair. This week looks set to be similarly quiet. Retail sales data (Tuesday) could garner some attention among market participants, though this will likely go under the radar. Expect the Canadian dollar to be largely driven by events elsewhere. SEK The increase in market risk aversion at the end of last week, due in part to escalating geopolitical tensions, weighed on the Swedish krona, which depreciated by almost 3% against the euro. This meant that SEK, which is one of the higher-risk major currencies in the world, ended the week as one of the worst performers in the G10. Figure 5: Inflation in Sweden [% YoY] (2012 – 2022) Source: Bloomberg Date: 21/11/2022 Rising domestic inflation, which soared to a 31-year high of 10.9% in October, perhaps contributed to this depreciation, as markets perceive this as further deteriorating the already bleak economic outlook. That said, we believe that the continued rise in inflation may force the Riksbank into raising its base rate aggressively at its meeting on Thursday. Our base case is for a 75 basis point rate hike, which could support the krona this week as this is not yet fully priced in. However, should the central bank suggest that it is increasingly concerned about the growth outlook, rather than fighting inflation, this could point to a moderate in the tightening cycle, which would be bearish for SEK. NOK In a similar fashion to SEK, the Norwegian krone did not have a good week, depreciating by more than 2% against the euro and the US dollar. Last week’s better-than-expected growth data limited some of the currency’s losses, although it was clear that investor sentiment remained one of the main drivers in markets. Figure 6: Norway GDP Growth (2012 – 2022) Source: Bloomberg Date: 21/11/2022 The Norwegian economy advanced 1.5% in Q3, following an upwardly revised 1.3% growth in Q2 – the largest expansion in a year. Mainland GDP, our preferred measure of growth that strips out the volatile oil and gas production component, also increased by a larger-than-expected 0.8% in Q3. In our opinion, the resilience of the Norwegian economy, together with the lack of a peak in domestic price pressures, suggest that Norges Bank may have to raise rates higher and deeper into next year than currently expected, which could support the krone. With no relevant domestic data out this week, we think that risk sentiment will be the main driver of NOK. CNY The Chinese yuan was little changed against the US dollar last week and ended roughly in the middle of the EM dashboard. Plans to ease some of China’s Covid restrictions, and efforts to support the country’s property sector, from the week before seem to have continued to work towards stabilising sentiment towards the yuan last week. Hard data for October released on Tuesday was largely on the weaker side, but not too different from expectations. While some of last week’s yuan fixings were rather strong, it seems that the easing pressure on the currency has allowed a shift towards a less aggressive stance from the PBOC. However, monetary authorities seem to be mindful of the exchange rate and don’t appear willing to engage in further policy easing, despite the economic slowdown. China’s MLF rate was left unchanged last week but, contrary to expectations, not all maturing loans were rolled over. This week, the loan-prime rates were also left unchanged. In the coming days, we’ll focus primarily on the coronavirus situation, as a recent increase in infections pushed the authorities to introduce local restrictions, dampening sentiment towards the yuan at the turn of the week. Economic Calendar (21/11/2022 – 25/11/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk    
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

USD/CAD Pair's Traders Will Pay Attention To Canadian Retail Sales

TeleTrade Comments TeleTrade Comments 22.11.2022 09:02
USD/CAD picks up bids to pare intraday losses, the first in three days. Fading risk-on mood, recently downbeat prices of Oil keep the pair buyers hopeful. Hawkish hopes from Fed, the market’s cautious sentiment can add strength to the recovery moves. Canada Retail Sales, US PMIs and FOMC are this week’s key catalysts. USD/CAD bears struggle to keep the reins around 1.3430-40 during early Tuesday morning in Europe. In doing so, the Loonie pair prints the first daily loss in three amid the broad US Dollar sellers. However, fresh challenges for Canada’s key export item, namely the WTI Crude Oil, join recently easing optimism to underpin the bullish bias as the pair traders await Canadian Retail Sales for September. WTI Crude Oil retreats to $79.90 while reversing the early Asian session rebound from the yearly low. The black gold prices recently dropped amid chatters that the key global oil producers, namely the OPEC+ group, are likely to keep the latest oil production accord until 2023, which in turn suggests more output. On the other hand, the latest Covid woes from China weigh on the demand concerns and drown the energy benchmark. Elsewhere, the US Dollar Index (DXY) rebounds from its intraday low but still prints mild losses around 107.70 on a day amid recently downbeat comments from the US Federal Reserve (Fed) officials. Also likely to have weighed on the USD/CAD could be the softer second-tier activity data from the US. Federal Reserve Bank of Cleveland President Loretta Mester said in a CNBC interview, “I think we can slow down from 75 at the December meeting.” Previously, Atlanta Federal Reserve President Raphael Bostic also turned down the 75 bps move and challenged the US Dollar bulls. Additionally, downbeat prints of the Chicago Fed National Activity Index for October, to -0.05 compared to 0.17 prior, also allow the US Dollar buyers to take a breather. Even so, escalating COVID-19 fears from China, as the nation reports the seven-month high virus numbers and rush to lock down the major hubs, underpin the bullish bias over the USD/CAD pair. Further, the hopes of aggressive Fed rate hikes especially after the previous week’s strong US Retail Sales and Producer Price Index (PPI) keep the Loonie pair buyers hopeful. Looking forward, USD/CAD traders will pay attention to Canadian Retail Sales for September, expected -0.7% MoM versus 0.7% prior, for clear directions. However, preliminary readings of the monthly activity data and the Federal Open Market Committee (FOMC) Meeting Minutes are the key catalysts for the pair. Technical analysis The previous support line stretched from August 11, as well as the 21-Day Moving Average (DMA), respectively near 1.3460 and 1.3480, challenges the USD/CAD buyers.      
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Canada: Retail sales declined, what can make a 50bp rate hike a less probable variant

Kenny Fisher Kenny Fisher 22.11.2022 22:04
The Canadian dollar is in positive territory on Tuesday. In the North American session, USD/CAD is trading at 1.3400, down 0.39%. Canada’s retail sales decline The Canadian consumer was not in a spending mood in September, as retail sales declined by 0.5%, following a 0.4% gain a month earlier. The forecast stood at -0.4%. Core retail sales fell by 0.7%, worse than the consensus of -0.4% and the prior reading of 0.5%. Despite the weak data, the Canadian dollar has managed to post gains today, thanks to a broad US dollar pullback. Read next: Elon Musk net worth has dropped by 37% in 2022| FXMAG.COM The drop in retail sales will put a damper on expectations of a 50-basis point hike at the December meeting, as the Bank of Canada will likely deliver a modest 25-bp hike. Inflation, the bank’s number one priority, remains very high at 6.9%, as the BoC’s aggressive rate-hike cycle is yet to show results. The benchmark rate is currently at 3.75%, and like the Federal Reserve, there’s more life remaining in the current rate-tightening cycle. The BoC is closely monitoring employment and retail sales data, as strong numbers will make it easier for the bank to continue hiking as policy makers look for that elusive peak in inflation. The recent US inflation report triggered a wave of exuberance, sending equity markets higher and the US dollar on a nasty slide. Investors became more confident that Fed was close to a pivot in its aggressive policy and risk sentiment soared. The Fed has pushed back hard, with Fed members delivering hawkish statements and projections, which has chilled risk appetite and stabilized the US dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%. USD/CAD Technical USD/CAD tested resistance at 1.3455 earlier in the day. Next, there is resistance at 1.3523 There is support at 1.3341 and 1.3218 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Analysis Of The CAD/JPY Commodity Currency Pair - 06.02.2023

The Slowing Canadian Economy And Rruling Out Of The Bank Of Japan Of Rate Cuts

InstaForex Analysis InstaForex Analysis 23.11.2022 10:41
Although markets are sluggish ahead of the upcoming holiday and long weekend in the US, stock indices are rising, while Treasury yields and dollar are falling. This is mainly due to the slightly less hawkish comments from Fed speakers this week, which is in contrast with the statement of St. Louis Fed President James Bullard last week that stressed that interest rates should reach at least 5-5.25%. San Francisco Fed chief Mary Daly also pointed out the need to be mindful of delays in the transmission of policy changes, and Atlanta Fed President Raphael Bostic stated that an additional tightening of 75-100p would be justified. So far, the rate forecast is stable. There is a 75% chance of a 50p increase, another 50p in February, and a peak to 5.06% by June. This is the benchmark that is currently guiding the markets. Today is packed with important statistics from the US. The first one will be the report on orders for durable goods, which will reflect the state of the industrial sector and consumer demand. Next is the consumer confidence indices from the University of Michigan, followed by the Fed minutes, where players will be looking for signals of a dovish reversal by the Fed. There are no signs that the dollar will resume rising. USD/CAD The slowing Canadian economy has not yet led to any noticeable deflationary pressure. The labor market is strong, with employment and wage growth being higher than that of the US. Retail sales also rose 1.5% m/m in October, which means that the Bank of Canada has more room to maneuver than the Fed and so far can implement a policy of containing inflation without looking at the rate of economic growth. Bank of Canada Governor Tiff Macklem will be giving a speech today, where markets expect to see a similar position to that of the Fed. However, this is likely to rule out strong moves. Regarding the loonie, the latest CFTC report showed that cumulative short positions declined by 402 million to -973 million, which means that there is a slow shift in sentiment. But overall the loonie remains bearish, with the settlement price pointing downwards and below the long-term average. It has a chance to strengthen. The possible rise of USD/CAD will end in the resistance area of 1.3500/30, followed by an attempt to test the local low of 1.3224. Chances for a deeper decline have become higher, with the target being the technical support at 1.30. USD/JPY Core CPI rose 3.6% y/y in October, 0.6% higher than that of September's. The data has risen for the 14th consecutive month, and the rate of growth is already higher than in 2014, when the sales tax was introduced to break out of the deflationary squeeze. By all indications, the time for deciding whether to end the stimulus programs is approaching. Last November 10, Prime Minister Fumio Kishida met with Bank of Japan Governor Haruhiko Kuroda, which resulted in new signals. Kuroda expressed the BoJ's position that a unilateral sharp depreciation of the yen is not welcome. This means that raising the yield ceiling for 10-year bonds from the current 0.25% is rejected, as is the ending of QQE. The rising inflation and ruling out of the BOJ of rate cuts for the time being sends a clear signal to investors who are selling the yen. As a result, the net short positions continued to decline, falling by 548 million to -5.909 billion during the reporting period. The settlement price is also reversed downward. For now, there is less reason for USD/JPY to resume its record rise as trading is highly likely to be sideways. There is also little chance that it will move beyond the technical resistance at 143.12, unless there are clearer signals from the Bank of Japan.     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327882
The USD/CAD Pair Has The Strong Downside Momentum

Canada: Shrank retail sales may decrease chances of a 50bp rate hike

Kenny Fisher Kenny Fisher 23.11.2022 21:50
The Canadian dollar has edged lower on Wednesday. In the North American session, USD/CAD is trading at 1.3428, up 0.42%. Is Canada heading towards a recession? The Canadian consumer is in a sour mood. I don’t blame her, given the cost-of-living crisis and higher mortgage payments due to rising interest rates. Retail sales for September slipped 0.5% MoM as expected, but lower than the August gain of 0.4%. More worrying, retail sales fell by 1.0% QoQ, the first quarterly decline since Q2 2020. Read next: The RBNZ Statement Forecasted That The Economy Will Tip Into Recession In June 2023| FXMAG.COM The decline in consumer spending could well be a result of the Bank of Canada’s concerted effort to beat inflation with a steep rate-hike cycle, which has raised the cash rate to 3.75%. Despite this, inflation has been stickier than expected, currently at 6.9%. The drop in retail sales will put a damper on expectations of a 50-basis point hike at the December meeting, as the Bank of Canada will likely deliver a modest 25-bp hike. Inflation, the bank’s number one priority, remains very high at 6.9%, as the BoC’s aggressive rate-hike cycle is yet to show results. The benchmark rate is currently at 3.75%, and like the Federal Reserve, there’s more life remaining in the current rate-tightening cycle. The BoC is closely monitoring employment and retail sales data, as strong numbers will make it easier for the bank to continue hiking as policy makers look for that elusive peak in inflation. The bank will have little choice but to continue raising rates until it sees indications that inflation is peaking, and is expected to continue raising rates into next year. Higher and higher rates make it ever more difficult for the BoC to guide the economy to a soft landing without tipping into a recession. The Canadian dollar could show stronger movement later in the day, with two key events on the calendar. BoC Governor Macklem will testify before a parliamentary committee in Ottawa, while the FOMC releases the minutes of its meeting earlier this month, where it raised rates by 75 basis points. USD/CAD Technical USD/CAD  is putting pressure on resistance at 1.3455. Next, there is resistance at 1.3523 There is support at 1.3341 and 1.3218 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD eyes Macklem, FOMC - MarketPulseMarketPulse
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

Oil Prices Put Additional Downward Pressure On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 25.11.2022 09:20
USD/CAD refreshes weekly low on Friday amid sustained selling around the US Dollar. The less hawkish FOMC minutes and a positive risk tone continue to weigh on the buck. An uptick in oil prices underpins the Loonie and contributes to the pair’s modest decline. The USD/CAD pair remains under some selling pressure for the fourth successive day on Friday and drops to a fresh weekly low heading into the European session. Spot prices, however, manage to hold above the 1.3300 round-figure mark and remain at the mercy of the US Dollar price dynamics. A dovish assessment of the FOMC meeting minutes released on Wednesday continues to weigh on the buck and is seen as a key factor acting as a headwind for the USD/CAD pair. In fact, officials were largely satisfied that they could stop front-loading the rate increases and that slowing the rate-hiking cycle would soon be appropriate. This, in turn, cements expectations for a 50 bps lift-off at the December FOMC meeting and drags the yield on the benchmark 10-year US government bond to its lowest level since early October. Apart from this, a generally positive tone around the equity markets is seen as another factor weighing on the safe-haven greenback. Furthermore, some follow-through uptick in crude oil prices underpins the commodity-linked Loonie and exerts additional downward pressure on the USD/CAD pair. That said, worries that the worsening COVID-19 situation in China will dent fuel demand keep a lid on any further gains for the black liquid. This, in turn, is holding back traders from placing aggressive bearish bets around the USD/CAD pair. In the absence of any major market-moving economic releases, either from the US or Canada, the US bond yields and the broader market risk sentiment will drive the USD demand. Apart from this, traders will further take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair. The intraday momentum, however, is likely to remain limited amid relatively thin trading volumes on the last day of the week.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Bank Of Canada (BoC) Disappointed The USD/CAD Bears

InstaForex Analysis InstaForex Analysis 28.11.2022 10:13
The loonie's fate is in the hands of the Canadian central bank. There are increasing speculations that the Bank of Canada will slow the pace of its rate hike again at the next meeting, raising it only by 25 points. Such rumors of a dovish nature are not absolute, but very persistent. In particular, last week currency strategists of RBC Capital Markets voiced a corresponding forecast. Moreover, in their opinion, the central bank as a whole is already close to the end of the cycle of interest rate hikes. Judging by the pair's dynamics, the loonie is not in a hurry to draw conclusions, although such conversations have stopped the downtrend. Thus, in the first half of November, the bears tried to stay under the support level of 1.3260 (at that time it corresponded to the bottom lines of the Bollinger Bands indicator on the D1 and H4 time frames) several times. But after the bears impulsively broke through this limit, they got stuck near the level of 1.3230. The downward momentum faded, the price returned to its previous positions. After several unsuccessful attempts, the USD/CAD bears intercepted the initiative, but the controversial FOMC minutes did not allow them to launch a bullish counter-offensive. The pair finished the previous trading week at 1.3376. This week the pair's traders will focus not only on Friday's reports (the U.S. and Canada will release key labor market data on December 2). The main "test" for the loonie will be the Canadian economic growth data which will be released on Tuesday (November 29). According to preliminary projections, Canada's GDP will only grow by 1.5%. Even if the figure comes out at the forecasted level, we could talk about a significant slowdown in the growth rate of the economy (3.1% growth in the first quarter, and 3.3% in the second quarter). If the release is in the red zone, the Canadian dollar will be under considerable pressure. Because in this case the dovish rumors about further actions of the Bank of Canada will only strengthen. The official comments of the central bank's representatives so far have been contradictory. For example, Bank of Canada Governor Tiff Macklem has recently sounded very vague about how Canadians should be prepared for further rate hikes "in addition to the six that have already occurred this year". He lamented the tight labor market ("demand exceeds supply") and suggested that economic growth will be "minimal" over the next few quarters, until about the middle of next year. But he did not talk about the expected pace of rate hikes or the final point in the current cycle. At the same time as the senior deputy governor of the Bank of Canada Carolyn Rogers reported that the end of the cycle of tightening of monetary policy is "already close". She added, however, that "in the near future" there is still a need to raise interest rates to reduce inflation. I would like to point out that the Bank of Canada disappointed the USD/CAD bears at its last meeting in October: contrary to expectations of most experts, it did not raise the interest rate by 75 points, limiting itself to a 50-point hike. According to Macklem, the decision to slow the pace of policy tightening was made "amid growing fears of a deepening global economic downturn". He added that the central bank is trying to balance the risks of "under- and over-tightening". Macklem said in passing that the central bank was "nearing the end of its rate-hike cycle". And although he immediately clarified that the process of raising the rate has not yet been completed, the message itself was perceived by the market accordingly. Thus, this week's key releases (especially Canadian GDP growth) will decide the fate of the USD/CAD pair in the medium term, as the Bank of Canada will be guided by them on December 7. The slowdown in economic growth, the decline in the labor market amid the first signs of easing inflationary pressures in recent months will create an appropriate springboard for a further slowdown in the pace of monetary tightening by the central bank. These circumstances will also support the view that the Bank of Canada may be nearing the end of its current interest rate hike cycle. A 25-point rate hike at the December meeting would then be the "first swallow" announcing the unwinding of the hawkish course. The U.S. Federal Reserve, for its part, remains hawkish despite a planned slowdown in the pace of rate hikes. Moreover, some Fed officials, most notably Fed Chairman Jerome Powell, allow the possibility that the upper limit of the current cycle could exceed the 5% level. In particular, not so long ago James Bullard spoke about an indicative target of 5.25%. At the same time, many members of the Committee are actively voicing the message that inflation is still high (despite the first signs of slowing growth), and therefore the Fed has "a lot of work to do". All this suggests that the fundamental picture on the pair is gradually progressing in favor of the bullish scenario. If the major macroeconomic releases disappoint the loonie, the bulls may retest the nearest resistance level of 1.3450 (middle line of the Bollinger Bands indicator on the daily chart). Last week, the USD/CAD bulls already tried to take this price barrier by storm, but in vain. The next (main) resistance level is located at 1.3700 (the upper line of the Bollinger Bands on the same timeframe). However, it is too early to talk about reaching this target.     search   g_translate     Relevance up to 22:00 2022-11-28 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328240
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

Strengthen The Canadian Dollar (CAD) Further Is Expected

TeleTrade Comments TeleTrade Comments 29.11.2022 09:28
USD/CAD is declining towards 1.3400 amid a sheer recovery in oil prices. The risk-off impulse has faded after china announces economic stimulus to offset the Covid-inspired volatility. Apart from Fed Powell’s speech, the US/Canada GDP data will be keenly watched. The USD/CAD pair is looking for an immediate cushion after a massive sell-off post failing to sustain above the critical hurdle of 1.3500. The loonie asset is hovering around 1.3433 and is expected to extend its losses towards the round-level support of 1.3400 amid a vertical rally in oil prices. Also, the recovery in the risk-appetite theme is expected to strengthen the Canadian Dollar further. Meanwhile, the US Dollar Index (DXY) has refreshed its day’s low at 106.14 amid a decline in safe-haven’s appeal. Contrary to that, 10-year US Treasury yields have recovered to near 3.71% as investors have turned anxious ahead of the speech from Federal Reserve (Fed) chair Jerome Powell. On the United States front, investors are awaiting the release of the quarterly Gross Domestic Product (GDP) data, which will release on Wednesday. The growth rate is expected to remain stable at 2.6%. Federal Reserve (Fed) policymakers brace for a slowdown in the growth rate as it will lead to a deceleration in inflation. Meanwhile, loonie investors are also awaiting GDP figures, which are due on Tuesday. The annualized GDP is expected to improve to 3.5% vs. the prior release of 3.3%. While, on a quarterly basis, the economic data could decline to 0.4% against the former release of 0.8%. On the oil front, oil prices have roared firmly on expectations of consideration of supply cuts by the OPEC cartel to offset the recent weakness. Meanwhile, public unrest in China has been calmed for a while as Chinese marshals have barricaded people at home under coercion. However, the situation has not been solved entirely. It is worth noting that Canada is a leading oil exporter to the United States, therefore, a meaningful recovery in oil prices supports the Canadian Dollar.    
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

China's Demand For Commodities, Goods And Production Capacity Is Important

InstaForex Analysis InstaForex Analysis 29.11.2022 14:08
Markets plunged on Monday as unrest in China, which was due to frustration at lockdowns, led to sell-offs. Equity markets closed lower, while crude oil prices dropped significantly. But the downturn is unlikely to last long because even though China's demand for commodities, goods and production capacity is important, a lot depends on the statements of world central banks. For example, St. Louis Fed President James Bullard said interest rates will continue to rise as inflation remains high. Lael Brainard, Thomas Barkin and John Williams said roughly the same thing, although they did not claim that aggressive rate hikes should continue. The upcoming speech of Jerome Powell is also expected to be hawkish, which can put pressure on stock markets and support dollar. There are some that believe that stocks will rally because investors have long since played down the Fed's extreme monetary policy stance. Markets are also reacting with great fervor to positive news, such as the short-term increase after the US published its latest inflation data. If Powell's rhetoric also does not turn out to be hawkish, there is a good chance that risk appetite will surge ahead of the Fed's December meeting. Forecasts for today: USD/CAD The pair is showing a local reversal on the back of a strong rebound in crude oil prices after its fall yesterday. A drop below 1.3415 will push quotes to 1.3320. AUD/USD The pair is rising amid improving market sentiment. A break above 0.6720 could bring the quotes to 0.6800. Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328414
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Canadian dollar may fluctuate on Friday as jobs market data is released in the USA and Canada

Kenny Fisher Kenny Fisher 29.11.2022 21:34
The Canadian dollar has steadied on Tuesday, after starting the week with sharp losses. In the European session, USD/CAD is trading at 1.3444, down 0.37%. Canada’s GDP expected to slow Canada will release third-quarter GDP later today, with a consensus of a 1.5% gain. This follows a strong Q2 gain of 3.3%.  The economy has been losing steam as interest rates continue to rise, and there are forecasts for negative growth as early as Q1 of 2023. Last week’s retail sales report did not impress. Retail sales for September came in at -0.5% MoM as expected, but lower than the August gain of 0.4%. More worrying, retail sales fell by 1.0% QoQ, the first quarterly decline since Q2 2020. The Canadian dollar should be busy on Friday, as both Canada and the US release the November employment report. Read next: FxPro's Alex Kuptsikevich: It is unlikely that the Fed would take this step. Monetary policy operates with a lag of about half a year | FXMAG.COM The Fed doesn’t hold a policy meeting until December 14th but Fed members continued to hit the airwaves on Monday. James Bullard said on Monday the markets could be underestimating the likelihood of higher rates and that the Fed funds rate will have to reach the bottom end of the 5%-7% range in order to curb inflation, which has been more persistent than anticipated. John Williams added that the Fed needed to do more work to tame inflation, which is “far too high”. Lael Brainard, a dove, expressed concern about inflation expectations rising above the Fed’s 2% target. The Fedspeak blitz could continue right up the meeting, as the Fed needs the markets to buy into its message that inflation has not peaked and the Fed remains hawkish and plans to keep raising rates. USD/CAD Technical USD/CAD is facing resistance at 1.3478 and 1.3576 There is support at 1.3398 and 1.3300 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steadies ahead of GDP - MarketPulseMarketPulse
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

On Friday greenback and Loonie may be fluctuating

Kenny Fisher Kenny Fisher 30.11.2022 19:02
The Canadian dollar has posted slight gains on Wednesday. In the North American session, USD/CAD is trading at 1.3541, down 0.28%. Will Powell’s speech be a market-mover? All eyes are on Fed Chair Powell, who will deliver a speech later today at the Brookings Institute in Washington. The fact that Powell’s remarks are the center of attention is an indication that market movement has become very dependent on rate policy. The Fed is expected to ease up on its pace of rates at the December meeting and deliver a 50-bp hike, after back-to-back increases of 75 bp. Still, the markets haven’t excluded the possibility of another 75 bp move. Investors are hoping to glean some clues from Powell as to when the Fed plans to wind up the current tightening cycle. Read next: EU works on a price cap on Russian oil. According to Craig Erlam (Oanda) OPEC+ think of a production cut| FXMAG.COM After the US inflation report underperformed, the markets climbed sharply and the US dollar sagged on speculation of a dovish pivot from the Fed. This exuberance didn’t last long, as one Fed member after another sent out a hawkish message, warning that inflation was not yet beaten and the rate hikes would continue. There is some uncertainty as to when the Fed funds rate will peak, with most forecasts projecting a range between 4.75%-5.25%. The Canadian dollar has just ended a nasty slide which saw it lose almost 300 points. We could see further volatility on Friday, when both Canada and the US release employment reports. The ADP payrolls report, released today, showed a small gain of 127, 000 jobs, down from 239,000 and shy of the consensus of 200,000. The report is not considered an accurate indication for nonfarm payrolls on Friday, and the ADP recently changed its methodology, which raises further questions about its accuracy. The forecast of nonfarm payrolls is 200,000, which would be a significant drop from the previous reading of 200,000. USD/CAD Technical USD/CAD tested support at 1.3576 earlier. Below, there is support at 1.3478 There is resistance at 1.3656 and 1.3782 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar ends slide, Powell next - MarketPulseMarketPulse
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

A Modest Retracement In Crude Oil Prices Lends Support To The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 01.12.2022 10:18
USD/CAD struggles to gain any meaningful traction amid the prevalent USD selling bias. A modest downtick in oil prices undermines the Loonie and helps limit the downside. Traders now look to the US PCE inflation data and ISM PMI short-term opportunities. The USD/CAD pair consolidates the previous day's heavy losses and oscillates in a narrow range, around the 1.3400 mark through the early European session on Thursday. The US Dollar languishes near a multi-month low in the wake of dovish comments by Federal Reserve Chairman Jerome Powell on Wednesday and acts as a headwind for the USD/CAD pair. In fact, Powell sent a clear message that the US central bank will soften its stance and said that it was time to moderate the pace of interest rate hikes. This leads to an extension of the recent sharp decline in the US Treasury bond yields and keeps the USD bulls on the defensive. Apart from this, the risk-on mood - as depicted by a positive tone around the equity markets - is seen as another factor weighing on the safe-haven Greenback. That said, a modest retracement in Crude Oil prices from a one-week high touched on Wednesday undermines the commodity-linked Loonie and lends support to the USD/CAD pair. The likelihood that OPEC+ will leave output unchanged at its meeting on Sunday and demand concerns act as a headwind for the black liquid. Nevertheless, the underlying bearish sentiment surrounding the USD suggests that the path of least resistance for the USD/CAD pair is to the downside. This, in turn, supports prospects for an extension of this week's sharp pullback from the vicinity of mid-1.3600s, or the highest level since November 4 set on Tuesday. Hence, any attempted recovery could be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Market participants now look forward to the US economic docket, highlighting the release of the Fed's preferred inflation gauge - the Core PCE Price Index - and ISM Manufacturing PMI. This, along with the US bond yields and the broader risk sentiment, will influence the USD. Traders will further take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair May Witness Further Downside

TeleTrade Comments TeleTrade Comments 02.12.2022 09:13
USD/CAD remains indecisive after two-day downtrend, defends weekly gains. Federal Reserve policymakers’ dovish bias, softer United States data weigh US Dollar. Chatters surrounding China, Oil price cap on Russian exports test WTI bulls. Downbeat expectations from Canada, United States employment report tease Canadian Dollar buyers. USD/CAD portrays the market’s indecision ahead of the monthly employment data from the United States and Canada during early Friday. In doing so, the Canadian Dollar fails to justify the retreat in the WTI crude oil, Canada’s key export item, amid a lackluster US Dollar. That said, the Loonie pair seesaws around 1.3430 by the press time, after a two-day downtrend. Even if the USD/CAD pair remains inactive as of late, the hopes of slower rate hikes from the Federal Reserve (Fed) contrasts with the recently hawkish bias surrounding the Bank of Canada (BOC) to keep the bears hopeful. It’s worth noting that the looming Oil price cap from the Group of Seven (G7) nations and recovery in China’s Covid conditions hint at the further firming of Canada’s key earner, which in turn could weigh on the Loonie pair. Federal Reserve policymakers contrast with Bank of Canada officials to favor USD/CAD bears The dovish bias of the Federal Reserve (Fed) Chairman Jerome Powell, as well as downbeat comments from US Treasury Secretary Janet Yellen, initially raised hopes of easy rate hikes. Following that, Federal Reserve (Fed) Governor Michelle Bowman stated that (It is) appropriate for us to slow the pace of increases. Before him, Fed Governor Jerome Powell also teased the slowing of a rate hike while US Treasury Secretary Yellen also advocated for a soft landing. Further, Vice Chair of supervision, Michael Barr, also said, “We may shift to a slower pace of rate increases at the next meeting.”  It’s worth noting that the recent comments from New York Fed’s John Williams seemed to have tested the US Dollar bears as the policymakers stated that the Fed has a ways to go with rate rises. On the other hand, Bank of Canada (BOC) Governor Tiff Macklem testified in late November while saying, “We expect our policy rate will need to rise further.” Additionally, BOC’s Senior Deputy Governor Carolyn Rogers said, “It will take time to get back to solid growth with low inflation but we will get there.” Differences between United States and Canada data also weigh on Loonie pair On Thursday, United States Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, matched 5.0% market forecasts on YoY but eased to 0.2% MoM versus 0.3% expected. Further, US ISM Manufacturing PMI for November eased to 49.0 versus 49.7 expected and 50.2 prior. Earlier in the week, the US ADP Employment Change marked the lowest readings since January 2021 with 127K figure for November versus 200K forecast and 239K previous readings. Further, the second estimate of the US Gross Domestic Product (GDP) Annualized for the third quarter (Q3) marked 2.9% growth versus 2.6% initial forecasts. Talking about Canada, Labor Productivity jumped to 0.6% in the third quarter (Q3) versus -0.1% expected and 0.1% prior (revised). Further, S&P Global Manufacturing PMI for November increased to 49.6 from 49.3 market expectations and 48.8 prior. Previously, Canada’s Gross Domestic Product Annualized for the third quarter (Q3) eased to 2.9% versus 3.5% expected and 3.2% (revised down) prior. Oil buyers stay hopeful WTI crude oil remains on the bull’s radar despite the latest retreat to $81.00. The reason could be linked to the comments from the Group of Seven Nations (G7) Price Cap Coalition, as well as hopes for China’s economic recovery. Late on Thursday, Reuters quoted an Official from the G7 Price Cap Coalition as saying, “We are 'very very close' to agreement on $60-a- barrel price cap on Russian oil exports.” The diplomat also showed optimism about agreeing on refined products price cap by February 5. Further, the consecutive three days of the downtrend of Chinese daily Covid infections from a record high allowed the policymakers to tease the “next stage” in battling the virus while announcing multiple easing of the activity-control measures. Additionally, a likely inaction at this week’s meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+. Considering Canada’s reliance on reliance on Crude Oil exports and likely hardships for the black gold supplies, as well as improvement in demand, the USD/CAD pair may witness further downside. United States, Canada job numbers are the key Given the likely downbeat outcome from both the Canadian and United States employment data, USD/CAD pair traders may try to find greater details and could react with more aggression in case of a surprise outcome. That said, the headline US Nonfarm Payrolls (NFP) is likely to ease with a 200K print versus 261K prior while the Unemployment Rate could remain unchanged at 3.7%. It should be noted that a likely easing in the Average Hourly Earnings for the stated month could also weigh on the USD/CAD price. On the other hand, Canada’s Net Change in Employment may decline to 5K versus 108.3K prior while the Unemployment Rate could increase to 5.3% from 5.2% previous readings. USD/CAD technical analysis Despite the latest inaction, the USD/CAD pair portrays a clear U-turn from the 50-DMA, as well as a downward-sloping resistance line from October 13, currently joining each other around 1.3570-75. However, a failure to break a two-week-old ascending support line, near 1.3400 by the press time, keeps the Loonie pair buyers hopeful. Even if the quote breaks the 1.3400 support line, a convergence of the 100-DMA and an ascending trend line from August 25, close to 1.3290 at the latest, appears a tough nut to crack for the USD/CAD pair sellers. Alternatively, a clear upside break of the 1.3570-75 resistance confluence will need validation from the recent peak of 1.3645 to convince USD/CAD bulls. Following that, a run-up towards the 23.6% Fibonacci retracement level of the Loonie pair’s August-October upside, near 1.3680, can’t be ruled out. It should be noted that the USD/CAD pair’s advances past 1.3680 may witness a bumpy road around 1.3840 before the bulls could aim for the yearly high marked in October around 1.3980. Overall, USD/CAD is likely to remain sidelined with a short-term downside bias. USD/CAD: Daily chart Trend: Limited downside expected     search   g_translate    
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Below-Forecast NFP Figures Could Encourage The Fed To Shift To A Softer Stance

InstaForex Analysis InstaForex Analysis 02.12.2022 09:27
Markets are looking out for today's US employment data as it could signal whether the Fed will finally end its cycle of aggressive interest rate hikes. Wednesday's ADP jobs report already came in well below expectations, while Jerome Powell's recent speech was less hawkish than expected. If upcoming news indicate a surge in lay-offs, sharp fall in employment and dip in new job gains, then this means that inflation is likely to ease soon, so the bank can confidently start to reduce the rate increases. This is also what Powell said when he indicated that Fed rates may increase by 0.50%, not 0.75%, in December. In short, below-forecast labor market figures could encourage the Fed to shift to a softer stance, which will be positive for markets. It could lead to a new rally in equities, especially in the US. As for Treasury yields, they will go down along with dollar. Forecasts for today: AUD/USD The pair is trading below 0.6830. If positive sentiment increases, the quote could break out of the resistance level and head towards 0.6900. USD/CAD A renewed rally in crude oil prices could put pressure on the pair. A drop below 1.3400 will bring it down to 1.3300. Relevance up to 06:00 2022-12-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328785
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

FX: Today’s US Payrolls With A Strong Bearish Rhetoric On The USD

ING Economics ING Economics 02.12.2022 09:56
While macro factors continue to point at dollar resilience in our view, markets are fully buying into the Fed's pivot story, and have turned more structurally bearish on the dollar. Today's US payrolls may fall short of triggering an inversion of this trend, and USD downside risks persist. Keep an eye on Canadian numbers too ahead of next week's BoC meeting USD: Payrolls may not offer lifeline to the dollar With the DXY index correcting by more than 7% since the early November peak, and trading below 105.00 for the first time since July, it is now evident that markets have operated a structural shift towards a bearish dollar narrative. It’s also evident that such a shift is primarily due to expectations that the Fed is nearing the end of its tightening cycle. As explained by our US economist here, investors have called Fed Chair Jerome Powell’s higher-for-longer “bluff”, applying a larger weight on four indicators (CPI, PPI, import prices and yesterday’s PCE) that are pointing to abating price pressures. Fed Funds futures show peak rate expectations have dropped below 4.90%, after having priced in 5.25% less than a month ago. In our view, this radical shift in the market’s reaction function is premature, and may not be sustainable if the Fed increases the volume of its rate protest by sounding more stubbornly hawkish and the next inflation readings argue against a rapid descent in inflation. Incidentally, the global macro picture remains challenging – especially in Europe (where colder weather may push gas prices higher) and China – which also points to dollar resilience. However, we must acknowledge that markets are approaching today’s US payrolls with a strong bearish rhetoric on the dollar, and would likely jump on more risk-on (USD-negative) bets unless we see a convincingly strong payroll read. The consensus is centred around 200k, and we forecast 220k, with the unemployment rate staying at 3.7%. Those numbers would be quite respectable and indicate that the jobs market has indeed remained extremely tight, but while it may halt the dollar’s trend, it could fail to invert it. All in all, the balance of risks appears slightly tilted to the downside for the dollar today. A contraction in payrolls to 150k could generate a fresh round of large USD selling.    The yen should be exceptionally sensitive to the jobs figures today. The main risk for USD/JPY is that UST 10Y yields fail to find extra support at 3.50%: a further bond rally could force a break below the 134.50 200-d MA and unlock additional downside potential for USD/JPY. Still, markets may struggle to live with sub-3.50% rates for long in the current environment. Francesco Pesole EUR: Ignoring some warning signs EUR/USD moves should only be a function of the market’s reaction to US payrolls today. There is a non-negligible risk we explore 1.0600, with the pair not having any clear resistance levels until the 1.0780 6-month highs. We are, however, getting the feeling that markets are ignoring at least one warning sign for the euro. The recovery in business sentiment in the eurozone has undoubtedly been the result of lower gas prices, which have benefitted from mild weather in Europe. TTF contracts are trading at one-month highs now and may see further upside volatility in the near term as temperatures in northern Europe are expected to fall. A significant recovery in gas prices would likely make the recent rally in EUR/USD unsustainable. On the domestic side, we’ll see PPI numbers in the eurozone today, and hear from ECB president Christine Lagarde again. Yesterday, she sounded quite hawkish, signalling the need to keep inflation expectations anchored and implicitly leaving the door open for a 75bp move in December. Markets currently price in 55bp, and we are calling for a half-point hike. Francesco Pesole GBP: Cable nearing the peak? There are no domestic drivers for the pound today given a light data calendar and no Bank of England speakers. As discussed in the dollar section above, US payrolls may fail to invert the bearish dollar trend and GBP/USD may find a bit more support around 1.2300-1.2350. However, as for EUR/USD, cable is not factoring in the negative implications of rebounding gas prices and weak economic fundamentals. A return to 1.1500 around the turn of the year seems appropriate in our view. Francesco Pesole CAD: Jobs numbers quite key for BoC Payrolls will also be published in Canada today. We must note the employment series has been rather volatile, with the October figures coming in at a very strong 108k, which was entirely driven by full-time hiring. The consensus is centred around a very small 10k increase, and there is a high chance we could see a negative read. This would probably keep markets leaning in favour of a 25bp rate hike by the Bank of Canada next week (currently, 30bp are in the price). However, we see room for some upside surprise today in the jobs numbers and see a higher chance of another 50bp by the BoC. USD/CAD may soon re-test the 1.3290 100-d MA, but would require a more steady rebound in crude prices to keep the bearish momentum going. Francesco Pesole Read this article on THINK TagsPayrolls FX Dollar CAD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Canada’s Economy Showed A Massive Gain In Jobs

Kenny Fisher Kenny Fisher 02.12.2022 10:21
The Canadian dollar continues to show limited movement. In the European session, USD/CAD is almost unchanged at 1.3433. We are likely to see stronger movement in the North American session, as both the US and Canada release the November employment reports. US nonfarm payrolls expected to soften Today’s highlight is the US nonfarm employment report, with a consensus of 200,000 for November. This follows a 261,000 gain in October. The US employment market has been surprisingly resilient, considering the sharp rise in interest rates. The employment market has recently started to cool off, but unless today’s NFP release significantly underperforms, it won’t change the Fed’s view that it is still too early to tell if inflation is on its way down. Canada’s economy showed a massive gain in jobs in October, with 108,300. This was ten times the estimate of 10,000. November is expected to show a small gain of 5,000, with the employment rate projected to tick higher to 5.3%, up from 5.2%. Canada’s economy is generally performing well, and today’s employment report is the final key release prior to the Bank of Canada’s rate meeting on December 7th. The Bank of Canada has been aggressive in its tightening, in order to curb inflation which is running at a 6.9% clip. Like the Fed, the BoC is looking for signs that inflation has peaked, but until then we can expect oversize rate hikes to continue, with a 50-bp hike likely next week. Jerome Powell’s speech on Wednesday sent the US dollar sharply lower, as Powell’s comments were not as hawkish as feared. Powell said that more evidence was needed to show that inflation was falling, and reiterated that rates would likely rise higher than the Fed has projected in September. Still, investors chose to focus on Powell’s broad hint that the Fed would ease the pace of rates next week with a 50-bp move, after four straight hikes of 75 bp.   USD/CAD Technical USD/CAD has support at 1.3398 and 1.3300 There is resistance at 1.3478 and 1.3576 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Oil Prices Has Gave A Support To The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 05.12.2022 09:34
USD/CAD is at a make or a break near the round-levels support of 1.3400. Upbeat US Nonfarm Payrolls have failed to provide a cushion to the US Dollar. The Bank of Canada is set to hike its interest rates by 50 bps consecutively for the second time. USD/CAD is expected to deliver more losses on a breakdown of the Ascending Triangle pattern. USD/CAD has witnessed a sheer downside after surrendering the critical support of 1.3442 in the Asian session. The loonie asset has dropped firmly below the round-level support of 1.3400 in the Tokyo session as a significant improvement in risk appetite has impacted the US Dollar. The US Dollar Index (DXY) has turned sideways after registering a fresh five-month low at 104.14. The USD Index is expected to extend its losses ahead as the risk-on impulse has strengthened dramatically. The US Dollar is facing immense pressure as the Federal Reserve (Fed) is shifting its mindset towards a slow rate hike culture to safeguard the United States economy from financial risks. S&P500 futures are displaying a lackluster performance as investors are awaiting the release of US ISM Services PMI data for fresh impetus. Meanwhile, the 10-year US Treasury yields have recovered firmly to near 3.53% on upbeat US Nonfarm Payrolls (NFP) data. Also, hawkish commentary from the Federal Reserve policymaker about interest rate peak has weakened US Treasury bonds. Chicago Fed President Charles Evans said on Friday, "We are probably going to have a slightly higher peak to Fed policy rate even as we slow pace of rate hikes," reported Reuters. Upbeat US Nonfarm Payrolls failed to provide cushion to the US Dollar Markets participants were expecting that only better-than-projected US labor market data could add life to the US Dollar. The Greenback has been facing immense pressure from investors after Federal Reserve policymakers started sounding ‘less hawkish’ on interest rate guidance. On the labor front, the United States economy added 261K fresh jobs against the projections of 200K. The jobless rate remained unchanged at 3.7%. The catalyst that could support the US Dollar ahead is the improvement in Average earnings data. The labor cost index has improved to 5.1%. Robust labor demand along with higher wage rates possess the capability of accelerating inflation as higher wages would force households to more spending on durables. This could refresh troubles for Federal Reserve chair Jerome Powell. Recovery in oil prices and upbeat Canadian employment data supported the Canadian Dollar The Canadian Dollar has been supported by a recovery in oil prices and better-than-projected payroll data.  Oil prices recovered sharply amid multiple tailwinds. Easing lockdown curbs in China and upbeats US Nonfarm Payrolls (NFP) data strengthened global economic projections. It is worth noting that Canada is a leading oil exporter to the United States economy and solid oil prices support the Canadian Dollar.   The Canadian economy added 10.1K jobs in November vs. the projections of 5K. Also, the Unemployment Rate has eased to 5.1% against the projections of 5.3%. This is going to delight the Bank of Canada (BOC) to announce a higher rate hike in its mission of bringing price stability. Bank of Canada is set to hike interest rates further Canada’s inflation rate remained unchanged in October at 6.9%, which indicates that the Bank of Canada is required to continue its policy tightening measures further to curtail inflationary pressures. In October’s monetary policy, Bank of Canada Governor Tiff Macklem hiked interest rates by 50 basis points (bps). As per the estimates from CIBC, the Canada central bank will continue its 50 bps rate hike regime. Analysts at CIBC point out that the Bank of Canada will increase rates by 50 bps on Wednesday, before pausing in 2023. A 50 bps rate hike by the Bank of Canada will accelerate the interest rate to 4.25%. This is going to widen the BOC-Fed policy divergence, which is impacting the Loonie asset for now. USD/CAD technical outlook USD/CAD is at a make or a break near the edge of the upward-sloping trendline of the Ascending Triangle chart pattern on a four-hour scale. The upward-sloping trendline of the chart pattern is placed from November 16 low at 1.3228 while the horizontal resistance is plotted from November 10 high at 1.3571. The Loonie asset has dropped below the 50-and 200-period Exponential Moving Averages (EMAs) at 1.3436 and 1.3459 respectively, which indicates that the short-term and long-term trend is bearish. Meanwhile, the Relative Strength Index (RSI) (14) is hovering around 40.00.  A breakdown of the same will trigger a bearish momentum.     search   g_translate    
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Crude Oil Prices Edge High And Acts As A Headwind For The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 06.12.2022 10:08
USD/CAD struggles for a firm intraday direction and remains confined in a range on Tuesday. A modest uptick in crude oil prices underpins the Loonie and acts as a headwind for the pair. The downside remains cushioned amid the emergence of some buying around the US Dollar. The USD/CAD pair oscillates in a narrow band on Tuesday and consolidates the overnight strong rally of around 220 pips from sub-1.3400 levels. The pair holds steady near a one-week high through the early European session, with bulls now awaiting a sustained strength beyond the 1.3600 round-figure mark. Crude oil prices edge high and recover a part of the previous day's slump of nearly 6.5% amid hopes for a recovery in fuel demand amid the easing of COVID-19 curbs in China. This, in turn, underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair. The downside, however, remains cushioned amid the emergence of some US Dollar buying, bolstered by bets that the Federal Reserve may raise interest rates more than projected. The Institute for Supply Management (ISM) reported that the US Service PMI unexpectedly increased to 56.5 in November from 54.4 in the previous month. This comes on the back of the upbeat US monthly jobs report released on Friday and suggests that the economy remained resilient despite rising borrowing costs. The incoming strong US macro data validates Fed Chair Jerome Powell's forecast that the peak interest rate will be higher than expected. The mixed fundamental backdrop, meanwhile, warrants some caution before placing aggressive directional bets around the USD/CAD pair. Traders might also prefer to move to the sidelines and await the latest monetary policy update by the Bank of Canada (BoC) on Wednesday. In the meantime, traders on Tuesday might take cues from the release of Trade Balance data from the US and Canada. Apart from this, the USD and oil price dynamics should provide some impetus.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Bank Of Canada: A 50bp Rate Hike Would Be Received As A Hawkish Surprise

ING Economics ING Economics 06.12.2022 11:52
Elevated inflation, robust economic activity and a super-tight jobs market argue for another 50bp rate hike. However, recession fears are rising and policy is in restrictive territory, meaning that the top in rates looks close. Markets are pricing in only 32bp at the moment, so a 50bp would likely send CAD higher, but the FX reaction should be short-lived. The Bank of Canada hiked rates by 100bp in July with more expected by year-end A very close call The Bank of Canada has raised interest rates a cumulative 350bp since the first move in early March and we look for a further 50bp hike on Wednesday. 3Q GDP came in at 2.9% annualized, nearly double the consensus forecast rate, while inflation at 6.9% continues to run at more than three times the 2% target. Then we had last Friday’s 108,300 increase in Canadian employment, meaning that there are now 523,000 more Canadians in work than there were before the pandemic struck in February 2020. Inflation is lower in Canada than in the US Source: Refinitiv, ING   At its latest meeting the BoC acknowledged that some effects of tighter policy were being seen, citing softer housing while weak external demand is also impacting the Canadian economy. But with demand continuing to outstrip the economy’s supply capacity, inflation pressures show little sign of softening as quickly as the Bank of Canada would like. They also warned that “price pressures remain broadly based, with two-thirds of CPI components increasing more than 5% over the past year”. That story has not changed and with central banks globally warning that the risk of doing too little to fight inflation outweighs the risk of doing too much the BoC are likely to signal further tightening remains possible.   For now we expect a final 25bp rate hike in early 2023, but this is not a strong call. The housing market is particularly vulnerable, with the mortgage market structure meaning Canadians are more impacted by rising rates than American home owners. We are also seeing signs in Europe and the US that inflation is showing more signs of softening and if replicated in Canada this may argue against that final hike. FX: Not many long-term implications for CAD Markets are pricing in only 32bp for tomorrow’s BoC announcement, so a 50bp rate hike would be received as a hawkish surprise and likely trigger a CAD rally. However, we expect the post-meeting FX impact to be rather short-lived, as external factors remain more important for CAD. The recent fragility in risk sentiment shows that downside risks for all high-beta currencies remain elevated. At the same time, CAD is considerably less directly exposed to swings in China’s sentiment compared to many other pro-cyclical currencies. The tightening supply picture in the crude market does leave room for a recovery in prices and this should be a positive development for the loonie. We think USD/CAD could end the year around 1.37 as the USD strengthening is partly offset by a potential recovery in oil prices.  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Bank Of Canada Did Not Become An Ally For The Loonie (CAD)

InstaForex Analysis InstaForex Analysis 08.12.2022 08:34
On Wednesday, the Bank of Canada announced the results of its final meeting this year. The Canadian central bank has raised its overnight rate by 50 basis points, lamented the high rate of inflation and praised the national economy's growth dynamics in the third quarter. However, despite such unipolar signals, the Canadian dollar did not benefit from the December meeting. On the contrary, the loonie weakened noticeably against the greenback: the USD/CAD pair reached its monthly high at 1.3650. What were the bulls unhappy with? In fact, it's a rare case, when the rally is not caused by strengthening of the greenback - in this case, the loonie is just getting weaker. The US dollar index is still under pressure (ahead of the December FOMC meeting), so the uptrend of USD/CAD only happened because the loonie's pessimistic. As is often the case, "the devil is in the details". For example, behind the loud statement that inflation in Canada is still unacceptably high is an inherently contradictory clarification. The central bank pointed out that three-month rates of change in core inflation have come down - and according to central bank economists, this is "an early indicator that price pressures may be losing momentum." This means that the central bank saw in the latest releases the first signs of slowing inflationary growth, with all the ensuing consequences. Recall that the core CPI (which excludes volatile food and energy prices), on an annualized basis, fell to 5.8% in Canada from the previous 6%. Most experts had expected an increase to 6.3% instead of a decline. However, perhaps in other circumstances market participants would have ignored the central bank's remark about the slowdown in inflation growth. But this thesis was voiced in conjunction with another message, the essence of which boils down to the readiness of the Canadian central bank to suspend the process of tightening monetary policy. On the one hand, Bank of Canada Governor Tiff Macklem said that they will maintain a hawkish course, given the high level of inflation in the country. But on the other hand, the text of the Bank of Canada's accompanying statement voiced the opposite signals. To be more precise, in the published statement the probability of further tightening of the monetary policy is already in question. The document states that the Governing Council "continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding." I suppose that the wording was the direct reason why the Canadian dollar weakened in the whole market. After all, this is not the first time the message has been voiced recently. In particular, the deputy head of the Canadian Central Bank Carolyn Rogers announced recently that the end of the tightening cycle of the monetary policy is "already near". And Macklem himself has repeatedly gestured that the central bank is "approaching the end of its rate hike campaign". Therefore, the wording of the final communique became a kind of "quintessence" of rhetoric of the Bank of Canada representatives. By the way, the 50-point rate hike in this context should not be considered as a hawkish factor. Do recall that some analysts (in particular, RBC Capital Markets) before the meeting said that the Canadian central bank can slow down the rate hike to 25 points, acting, so to speak, "quietly" in the beginning of 2023. But the central bank, on the one hand, decided to keep the 50-point pace, but on the other hand, de facto allowed a pause in the rate hike. Such a strategy was interpreted by the market as a factor that is not in favor of the loonie, due to which the Canadian currency plunged throughout the market. Bulls need to overcome the resistance level of 1.3690 (in this price point, the upper line of the Bollinger Bands indicator coincides with the upper limit of the Kumo cloud on the D1 timeframe) in order to develop an uptrend. The Bank of Canada did not become an ally for the loonie, but now it is important that the Fed does not become an "enemy" of the greenback. In other words - prospects of developing the uptrend now depend on the Federal Reserve. We can suppose that the results of the December meeting of the Bank of Canada will allow the bulls to test the resistance level of 1.3690, and probably, the area of the 37th figure. But the bulls need the support of the US central bank for a large-scale (and most importantly, stable) bullish attack. Thus, taking into account forthcoming events in the US (release of the data on inflation growth in the US and the Fed's December meeting), it is impossible to speak about bullish prospects for USD/CAD now. In the current conditions, "safe longs" should be in the range of 1.3690-1.3700. The nearest support level is 1.3550 (average Bollinger Bands line on H4 and Tenkan-sen line on D1).   Relevance up to 00:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329237
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

Bank of Canada went for 50bp, hints at the end of tightening

ING Economics ING Economics 08.12.2022 09:09
The market had been split as to whether the Bank of Canada would hike interest rates by 25bp or 50bp. Strong growth, a tight jobs market and elevated inflation led it to opt for the larger move, but having previously suggested ongoing tightening, the bank is now saying it is merely 'considering' whether additional hikes will be required 4.25% Canada's overnight interest rate   BoC goes for a more aggressive 50bp hike So we got a 50bp hike from the Bank of Canada – in line with our view, but the market had been more cautious, pricing in only around 33bp ahead of the decision. The accompanying statement acknowledges that growth is "proving more resilient than was expected" with Canada's labour market remaining "tight" and the economy "continuing to operate in excess demand". Nonetheless, there is "growing evidence that tighter monetary policy is restraining domestic demand", citing softer consumer spending growth and a weakening housing market. The bank is expecting that "growth will essentially stall through the end of this year and the first half of next year". As for inflation, it is "still too high", but there are early indications that "price pressures may be losing momentum". Central bank policy interest rates (%) Source: Macrobond, ING A dovish shift suggests further hikes are no longer the default position As for the outlook, the central bank has hinted that we are now very close to the end of the tightening cycle with the Governing Council "considering whether the policy rate needs to rise further". At the last meeting in October, BoC said "the Governing Council expects that the policy interest rate will need to rise further" – so this is a dovish shift. We have been pencilling in a final 25bp hike early next year for quite some time. The next meeting is 25 January and such a move would take the policy rate to 4.5%. However, the housing market is looking particularly vulnerable, with the mortgage market structure meaning Canadians are more impacted by rising rates than American homeowners, given shorter periods of fixed mortgage rates. The global growth story is weakening, as underlined by today's Chinese trade data, and we are seeing signs in Europe and the US that inflation is moderating. If replicated in Canada, this would argue against that final hike. We will keep that last 25bp in for now but it is a low-conviction call. Read next: Unconventional Measures Taken By Musk In Managing Twitter| FXMAG.COM FX: Bigger hike doesn't mean stronger CAD Despite the larger-than-expected rate hike, USD/CAD has struggled to move below 1.3600, which is due to a) the more dovish tone in the statement around the future path of rate increases; and b) an external environment that remains largely unsupportive for CAD. On the second point, crude prices below $80/bll are undoubtedly weighing on the loonie, especially since they have been accompanied by consecutive days of deteriorating risk sentiment. The silver lining for CAD from the BoC dovish tilt is that there could be a lower probability of a disorderly fall in house prices, which was a key tail risk for CAD next year. We expect a stabilisation in USD/CAD into year-end, but upside risks should continue to prevail unless oil prices rebound. Looking at next year, we continue to favour the loonie over other pro-cyclical currencies, given more limited exposure to China and Europe’s economic woes. Read this article on THINK TagsIntrest rates Canada CAD BoC Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/CAD Pair Has The Strong Downside Momentum

USD/CAD Pair: Limited Downside Movement Is Expected

TeleTrade Comments TeleTrade Comments 08.12.2022 09:49
USD/CAD pulls back from intraday high to pare daily gains. Weekly support line holds the key for bear’s entry. Buyers need validation from November’s peak to keep the reins. USD/CAD registers another failure to cross the one-month-old resistance line as it drops to 1.3655 amid the initial hour of Thursday’s European trading session. The Loonie pair’s latest declines also take clues from the impending bear cross on the MACD, as well as RSI (14) pullback from the overbought territory. Although the intraday bears are having an upper hand by the press time, an upward-sloping support line from Monday, close to 1.3650, restricts the USD/CAD pair’s immediate downside. Following that, a southward trajectory towards the 200-Simple Moving Average (SMA) level surrounding 1.3480 can’t be ruled out. However, a three-week-old ascending trend line near 1.3420 appears crucial for the USD/CAD seller’s further dominance as a break of which won’t hesitate to poke the previous monthly low of 1.3226. Alternatively, an upside clearance of the monthly resistance line near 1.3685 will need validation from the 1.3700 threshold and November’s peak of 1.3808 to convince the USD/CAD bulls. In that case, the 1.3855-60 and the 1.3900 level could also probe the Loonie pair’s further upside before highlighting the 1.4000 psychological magnet. USD/CAD: Four-hour chart Trend: Limited downside expected
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

The Falling Yields Kept The US Dollar (USD) Under Pressure

Swissquote Bank Swissquote Bank 08.12.2022 10:08
Stocks fell for a fifth day, but the sovereign bonds gained, a hint that the market catalyzer shifted from the hawkish Federal Reserve (Fed) pricing – where stocks and bonds fall at the same time, to recession fears, where stocks remain under pressure, while investors seek refuge in safer sovereign assets. Yields and USD The falling yields kept the US dollar under pressure below the critical 200-DMA, which stands at 105.75. American crude oil One big move of the day was oil. The barrel of American crude slipped below the $73 floor and fell to $71.70 on the back of rising recession fears. Oil And note that we have started seeing a structural change in the oil markets. Crude price curve was in backwardation up until a month ago. But over the past weeks we started seeing the front-end of the price curve falling and even going back to contango. I discuss in this episode what that means for oil prices. Gold Elsewhere, news that China increased its bullion reserves for the first time in three years have a boost to gold and silver. The mint ratio fell below 80, but gold could still be a better choice for those preparing their portfolios for recession. Watch the full episode to find out more! 0:00 Intro 0:31 Markets price in recession 2:36 Oil slips below $72pb 3:57 Is contango coming & what does it mean? 6:25 Loonie to remain under the pressure of weaker oil 8:00 Gold or silver?! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Crude #oil #contango #backwardation #energy #crisis #recession #fear #market #selloff #USD #EUR #Gold #silver #mint #ratio #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Surprising Japan GDP let yen rally, Bank of Canada doesn't help Loonie, hints at hiking slowdown

Surprising Japan GDP let yen rally, Bank of Canada doesn't help Loonie, hints at hiking slowdown

Jing Ren Jing Ren 08.12.2022 08:37
In today's Orbex Analysis Jing Ren talks Forex pairs - greenback versus yen, Loonie and WTI crude oil. USDJPY recoups some losses The Japanese yen rallies over better-than-expected GDP in Q3. The pair has found solid support at 134.20 near August’s lows. The latest rally is likely to be driven by sellers’ profit-taking, which means that it would be too soon to talk about a full-fledged recovery. 138.80 on the 20-day moving average is the first obstacle, and the bulls will need to clear the daily resistance at 141.50 before they could turn sentiment around. 136.00 is the first level to gauge the strength of buying interest in case of a pullback. USDCAD tests resistance The Canadian dollar struggles as the lack of forward guidance by the BoC hints at slower tightening. A break above the previous peak at 1.3640 has put the bears on the defensive. The RSI’s multiple entries in the overbought area showed exhaustion and led to a pullback as the price tested the support-turned-resistance of 1.3700. A breakout could pave the way for a bullish continuation above the November high of 1.3800. On the downside, 1.3580 is the closest support and 1.3400 a critical level to keep the recovery intact. Read next: BMW Was Fined 30,000 Pounds By CMA, Google Wants To Become More Productive| FXMAG.COM USOIL sees limited bounce WTI crude dips on an unexpected rise of US fuel stocks. A close below the previous low of 73.70 shows that the path of least resistance remains down. More traders may look to sell into strength as the commodity struggles to claw back losses. The RSI’s oversold condition may cause a limited rebound. Offers could be expected around the former support of 78.00. 82.50 is a major cap that is likely to keep the price under. A new round of selling would send the price to a 12-month low and at the psychological level of 70.00.
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The Next Decision Of The Bank Of Canada Will Be Between A 25bp Rate Hike And A Pause

Kenny Fisher Kenny Fisher 08.12.2022 14:44
Bank of Canada surprises with 50 bp hike The Bank of Canada delivered a second straight 50-bp hike on Wednesday, which brought the cash rate to 4.25%. The markets had been split on whether the BoC would raise by 50 bp or 25 bp, pricing in 33 bp ahead of the decision. The move didn’t have an effect on the Canadian dollar, which closed the day unchanged. The BoC decided on the larger rate move due to strong growth, a tight labour market and high inflation. The rate statement noted that inflation is “still too high” but added that core inflation has been falling, which may indicate that inflationary pressures are “losing momentum.” What’s next for the BoC? The rate statement contained a significant hint that the Bank may be close to winding up the current tightening cycle, stating that the BoC was “considering whether the policy rate needs to rise further”. This was in contrast to the October meeting when the BoC stated it “expects that the policy interest rate will need to rise further.” This appears to be a dovish shift, in that additional rate hikes are longer a given. The BoC meets next in late January, and the Bank’s rate decision could again go down to the wire, only this time it will be a choice between a 25 bp increase and a pause. Policy makers have some time to gauge the effect of high rates on the domestic economy and they will also be keeping a close eye on developments in Europe, China and the US. Ahead of next week’s CPI report, the US releases PPI and UoM Inflation Expectations on Friday. There are signs that inflation is weakening, and if this is reflected in Friday’s data, the financial markets could get a boost and the US dollar could lose ground, a scenario we’ve become accustomed to seeing whenever inflation underperforms.   USD/CAD Technical There is weak resistance at 1.3681. The next resistance line is 1.3766 USD/CAD has support at 1.3596 and 1.3484 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

On Wednesday stocks lost, but sovereign bonds increased. Decline of oil prices affect Canadian dollar

Ipek Ozkardeskaya Ipek Ozkardeskaya 08.12.2022 15:12
Stocks fell for a fifth day, but the sovereign bonds gained, a hint that the market catalyzer shifted from the hawkish Federal Reserve (Fed) pricing – where stocks and bonds fall at the same time, to recession fears, where stocks remain under pressure, while investors seek refuge in safer sovereign assets.   The latest data showed that around $5 billion flowed into US bond ETFs over the past week. Ishares 7–10-year Treasury bond ETF is up by more than 7% since the October dip, up by 3% since the beginning of December and should recover further as investors are expected to return to bonds before they return, sustainably to equities.   The S&P500's latest bear market rally is weakening by the day. The index gave back another, though a slim 0.20% yesterday, and closed near its 100-DMA.   The US 10-year yield slipped below its own 100-DMA for the first time since August – when investors were pricing recession fears remember – although at that time recession fears fed into softer Fed expectations and boosted the stock valuations. Today, it's not the case. The recession fears only increase worries about the future health of the economy, as Fed expectations remain relatively hawkish.   The falling yields kept the US dollar under pressure below the critical 200-DMA, which stands at 105.75.   The EURUSD hovers around the 1.05 mark following the dollar's waltz, while Cable is holding on to its gains above the 200-DMA, near 1.2125, but remains perfectly at the mercy of the next move from the greenback.  Oil's dive  One big move of the day is oil. The barrel of American crude slipped below the $73 floor and fell to $71.70 on the back of rising recession fears.   The fact that the Europeans revised their Q3 GDP higher, that Germany revealed a weaker-than-expected contraction in industrial production, that the Chinese continue relaxing Covid measures, and that the Chinese central bank promised to keep financial conditions soft enough to boost economic growth – and reverse the economic disaster, did nothing to improve the mood. The latest news and data remained fully in the shadow of a sharp 8.7% fall in Chinese exports in November released yesterday. The US crude oil inventories fell more than 5 mio barrels last week, but the gasoline inventories rose more than 5 mio barrels, making the data difficult to give direction.   Read next: BMW Was Fined 30,000 Pounds By CMA, Google Wants To Become More Productive| FXMAG.COM But note that we have started seeing a structural change in the oil markets. Crude price curve was in backwardation up until a month ago. But over the past weeks we started seeing the front-end of the price curve falling and even going back to contango. That means that immediate demand for oil is weakening due to recession fears, and that we may not see a soft landing in the US economy, even less in the world economy next year. The latter could further weigh on crude prices, and we could see the price of a barrel slip below $70 before the year-end.   The 'only' good news...  The softening US dollar gives other pairs space to breathe. This is perhaps why we see the European companies posting mild losses. The German Dax index lost only about 2% since it peaked early December, whereas the S&P500 lost the double that amount, a bit more than 4%.   And if the softer dollar helped some majors like euro and sterling keep their head above water, the USDCAD advanced to 1.37 yesterday, even after the Bank of Canada (BoC) decided to go ahead with a 50bp hike, instead of 25bp, but didn't say that there will be more rate hikes – an absence which has been interpreted as 'maybe there will be no more hikes'.   Of course, the sharp drop in oil prices does impact Loonie negatively as there is a clear positive correlation between oil prices and the Canadian dollar. Therefore, if crude oil continues its journey south, there is little to prevent the USDCAD to advance past the 1.38 level. The only thing that could slow down the Loonie's fall, is the dollar's global depreciation. Otherwise, the year-end outlook for the Loonie looks rather bearish.    If all this is not depressing enough...  Russian President Vladimir Putin said that the nuclear threat is rising and didn't say he wouldn't use a nuclear weapon to defend itself, giving a fresh boost to geopolitical tensions.   Gold may have benefited from rising safe haven flows – although the US dollar remains the ultimate safe haven if you fear a further escalation of military tensions with Russia.   Read next: The Euro Benefited From The Weakening Of The US Dollar, A Potential Downside Risk For The Australian Dollar Over The Next Few Weeks| FXMAG.COM What also made gold and silver shine yesterday – besides from the softer US dollar - was news that China increased its bullion reserves for the first time in three years, in an effort to diversify away from the US dollar. The price of an ounce rebounded to $1790. In this short run, gold bulls will likely see further resistance above the 200-DMA, and the $1800 psychological resistance. But the weakening US dollar outlook strengthens appetite for gold in the medium run. There is potential for around $100 rise to $1880, May peak.
The USD/CAD Pair Has The Strong Downside Momentum

USD/CAD Pair Remains Pressured And Downside Movement Is Expected

TeleTrade Comments TeleTrade Comments 09.12.2022 09:22
USD/CAD fades bounce off intraday low, struggles to reject two-day downtrend. Multiple hurdles to the north join downbeat RSI conditions to challenge bulls. Sellers have comparatively smoother roads to travel on breaking 1.3560. USD/CAD retreats to 1.3588 as bulls struggle to defend the first daily gains in three heading into Friday’s European session. In doing so, the Loonie pair justifies downbeat RSI (14), as well as failures to cross the near-term key hurdles, in teasing the bears. That said, the latest lows surrounding 1.3560 holds the key for the USD/CAD seller’s entry, a break of which could quickly drag the quote towards the December 02 swing high near 1.3520. Following that, the 1.3500 round figure may act as an intermediate halt before highlighting the two-week-old support line, close to 1.3435 at the latest, for the pair bears. In a case where USD/CAD bears dominate past 1.3435, the odds of witnessing a fresh monthly low, currently around 1.3385, can’t be ruled out. On the flip side, a one-week-old horizontal resistance area near 1.3600 restricts the immediate upside of the USD/CAD pair. Also acting as the key barrier for the pair buyers is the 1.3640-45 area that encompasses multiple levels marked since November 29. Overall, USD/CAD remains pressured unless the quote successfully breaks the 1.3645 hurdle. USD/CAD: Hourly chart Trend: Further downside expected
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Absence Of Hawkish Remarks From BOC’s Macklem Could Help The USD/CAD

TeleTrade Comments TeleTrade Comments 12.12.2022 09:31
USD/CAD retreats from intraday high, struggles to defend buyers. WTI bounces off yearly low, snaps six-day downtrend, amid fears of supply crunch. Sour sentiment, anxiety ahead of the key data/events underpin US Dollar. Speech from BOC Governor Maclem can entertain traders ahead of bumper catalysts. USD/CAD consolidates daily gains around 1.3650 heading into Monday’s European session as the Loonie pair traders turn cautious ahead of a speech from Bank of Canada (BOC) Governor Tiff Macklem. Also challenging the pair buyers could be the recently firmer prices of Canada’s key export item, WTI crude oil. It’s worth noting, however, that the hawkish Fed bets and recession woes keep the US Dollar firmer as traders await Tuesday’s US Consumer Price Index (CPI) and Wednesday’s Federal Open Market Committee (FOMC) meeting. WTI crude oil prints mild gains around $71.80 as it bounces off the yearly low while snapping a six-day downtrend. In doing so, the black gold portrays the supply crunch fears as Russian President Vladimir Putin rejects supplying oil to those countries who accept the European Union (EU)-led oil price caps. Also likely to challenge the oil flow could be the shutdown of the key pipeline supply energy benchmark to the US, namely the Keystone pipeline. On Sunday, Canada's TC Energy said it has not yet determined the cause of the Keystone oil pipeline leak last week in the United States, while also not giving a timeline as to when the pipeline will resume operations, reported Reuters. On the other hand, the US Dollar Index (DXY) extends Friday’s gains amid recession woes, recently highlighted by US Treasury Secretary Janet Yellen. On Friday, the US Producer Price Index (PPI) matched the market forecasts of 7.4% YoY for November versus 8.1% prior. Further, the Core PPI rose to 6.2% YoY versus 6.0% expected and 6.7% previous readings. Additionally, preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index rose to 59.1 for December versus 53.3 market forecasts and 56.8 final readings for November. Moreover, the 1-year inflation expectations dropped to 4.6%, the lowest since September 2021 while compared to 4.9% expected whereas 5-10 year expectations were stable at 3.0%. It should be noted that the US ISM Services PMI improved to 56.5 versus 54.4 expected. While portraying the mood, the markets witness a sluggish start to the key week with mildly offered S&P 500 Futures and inactive Treasury yields. To sum up, mixed sentiment and anxiety prior to the crucial data/events can keep the USD/CAD on the front foot even if the latest rebound in oil prices probes the upside moves. It should be noted that the absence of hawkish remarks from BOC’s Macklem could help the Loonie pair to remain firmer as the Canadian central bank has recently ruled out odds of aggressive rate hikes. Technical analysis A daily closing beyond the seven-week-old descending resistance line, around 1.3655, becomes necessary for the USD/CAD bulls to keep the reins. However, the pair bears are off the table unless witnessing a clear downside break of the previous resistance line from October 13, close to 1.3510 at the latest.    
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

US Inflation Data May Affect The Type Of Fed Decision, Which Will Be An Important And Long-Lasting Event

InstaForex Analysis InstaForex Analysis 12.12.2022 10:23
The Fed will start its two-day monetary policy meeting on Tuesday, during which the members will recap the past year and make its forecasts for GDP, labor market, employment and interest rates for the coming years. It will be an important and long-running event as it will determine, at least for the first quarter of next year, the bank's overall view of the economy. Tomorrow's release of consumer inflation data in the US will not go unnoticed either as expectations are a 7.3% rise in CPI y/y and 0.3% m/m. But if the figures show a decline, inflationary pressures will ease, which is good for the economy. This may give the Fed a strong reason to reduce the rate hike after Wednesday's 0.50% increase. In the event of such a scenario, a strong rally in stock markets will occur, accompanied by a decline in dollar and Treasury yields. But if the CPI data exceed expectations, demand for equities will dip, while dollar will surge Forecasts for today: USD/JPY The pair remains trading within the range of 135.80-138.00. It will not go out until the release of the US consumer price index. USD/CAD The pair is trading within the range of 1.3535-1.3700. It will not go out until the release of the US consumer price index and the Fed monetary policy meeting.     Relevance up to 07:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329494
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Higher Interest Rates Could Push The Canadian Economy Into An Unnecessarily Painful Recession

TeleTrade Comments TeleTrade Comments 13.12.2022 09:36
USD/CAD has managed to pick bids above the crucial support of 1.3600. A decline in United States inflation will set the stage for a slowdown in the interest rate hike by the Federal Reserve. The Bank of Canada is ready to hike interest rates further if it fails to see signs of a slowdown in inflation. USD/CAD is expected to display a sheer move as the RSI (14) is hinting at a volatility contraction. USD/CAD has attempted a recovery after dropping marginally below the crucial support of 1.3620 in the early European session. The Lonnie asset is aiming to conquer the immediate resistance of 1.3640 as the US Dollar Index (DXY) has recovered sharply as the market mood has turned cautious again ahead of the United States inflation and the outcome of the Federal Reserve (Fed) policy. The US Dollar Index (DXY) has recovered sharply after a corrective move below the round-level support of 105.00. The USD Index has accelerated its recovery to near 105.06 and is expected to remain volatile ahead. Investors are confused about whether to underpin the risk-aversion theme as the Federal Reserve is set to hike its interest rate peak guidance in its monetary policy meeting on Wednesday or to support the risk appetite theme due to lower consensus for the United States Consumer Price Index (CPI) data. Meanwhile, S&P500 futures are displaying a marginal fall in early London after posting solid gains on Monday. The 10-year US Treasury yields are hovering around the critical resistance of 3.60%, displaying obscurity in the market mood. Upbeat US PPI and lower annual inflation expectations trim inflation consensus Market participants have got anxious ahead of the release of the US inflation. Price pressures have remained the talk of the town this year as the sentiment of the households remained dented and the Federal Reserve policymakers remained worried thinking about the consequences of a higher price rise index. A surprise drop in November’s Producer Price Index (PPI) report and one-year consumer inflation expectations is hinting at a slowdown in the current inflation rate. The headline PPI dropped to 7.4% as producers are worried about a decline in consumer spending. While one-year consumer inflation expectations have declined to 5.2% in November from 5.9% in October, marking the biggest one-month decline on record. This has led to a decline in the consensus for headline inflation to 7.4% vs. the former release of 7.7%. While the core CPI is expected to trim to 6.1% against 6.4% reported earlier. Analysts at JP Morgan Chase & Co. have cited that a soft reading in US CPI data could spark a powerful rally in US equities. The 500-stock basket of the United States could rally up to 10% if headline inflation drops to 6.9% or lower, as reported by Bloomberg. Lower inflation to cement a slowdown in Federal Reserve’s interest rate hike pace Mounting inflation pressures have been forcing the Federal Reserve to tighten the interest rate policy despite the accelerating risks of a recession. The agenda of the Federal Reserve chair Jerome Powell has been the achievement of price stability. Signs of deceleration in the inflationary pressures will set the stage for a slowdown in the policy tightening pace by the Federal Reserve. The risk of higher interest rate peak guidance for CY2023 as the inflation rate will remain beyond the targeted rate of 2% for a while. Rabobank analysts said they expect the US central bank to hike the policy rate by 50 basis points (bps) and see policymakers revising the terminal rate projection to the neighborhood of 5%. BOC Governor seems on foot to hike rates further if fails to dwindle inflation The speech from Bank of Canada (BOC) Governor Tiff Macklem on Monday cleared that the Canadian central bank won’t think twice about hiking interest rates further if inflation remains stubborn ahead. While speaking to business leaders in Vancouver, the Bank of Canada Governor said that policy tightening has begun to work but would take time to feed the economy. The present challenge in front of the Bank of Canada is that higher interest rates could push the economy into an unnecessarily painful recession, as reported by Reuters. USD/CAD technical outlook USD/CAD has dropped after facing barricades around the supply zone placed in a narrow range of 1.3690-1.3700 on an hourly scale. On a broader note, the 20-period Exponential Moving Average (EMA) at 1.3640 is overlapping with the Loonie asset price, which indicates a sideways auction profile. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead till the release of a potential trigger
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Has The Potential For Further Upside Movement

TeleTrade Comments TeleTrade Comments 14.12.2022 09:14
USD/CAD grinds higher after bouncing off weekly low. Bullish MACD signals, sustained trading beyond convergence of 21-day EMA, one-month-old support line favor buyers. Seven-week-old descending trend line restricts recovery moves ahead of monthly high. USD/CAD remains sidelined around mid-1.3500s, picking up bids to 1.3565 by the press time of early Wednesday morning in Europe. In doing so, the Loonie pair defends the early Asian session recovery from the 1.3530 support confluence including the 21-day EMA and a one-month-old ascending trend line. Additionally favoring the upside momentum are the bullish MACD signals. That said, a downward-sloping resistance line from October 21, close to 1.3650 at the latest, restricts the quote’s short-term upside. Following that, the monthly high of 1.3700 will be crucial resistance as it holds the gate for the USD/CAD pair’s run-up toward the previous monthly high surrounding 1.3810. It’s worth noting, however, that multiple hurdles near 1.3850 and 1.3900 could test the bulls past 1.3810. Meanwhile, a daily closing below the 1.3530 support confluence won’t hesitate to challenge the monthly low of 1.3385. Should the USD/CAD bears keep the reins past 1.3385, the 50% Fibonacci retracement level of August-October upside, near 1.3350, will precede November’s bottom surrounding 1.3230 to challenge the Loonie pair’s further downside. Also acting as a downside filter is the 61.8% Fibonacci retracement level of 1.3200. USD/CAD: Daily chart Trend: Further upside expected
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

There Was A Strong Rally Ahead Of The Announcement Of The Fed's Decision On Monetary Policy

InstaForex Analysis InstaForex Analysis 14.12.2022 11:11
The latest consumer inflation data in the US indicated a noticeable decline, which caused a strong drop in dollar, an increase in demand for equities and a decline in government bond yields. The report noted that CPI in the US fell from 7.7% to 7.1% y/y in November and decreased from 0.4% to 0.1% m/m. Although this is much lower than expected, the figure really impressed investors, so there was a strong rally ahead of the announcement of the Fed's decision on monetary policy. More importantly, the central bank will also reveal its forecasts for future inflation, GDP and unemployment, which will give investors an indication of how long the rate hike cycle will last and how deep a possible recession could be. In addition, Fed Chairman Jerome Powell has a speech scheduled, in which he is likely to discuss their assessment of the economy and future plans for monetary policy. So far, markets believe that his statements will be hawkish, but some are expecting a softer one where the Fed will say that it will be ready to stop raising rates sooner rather than later. If things go that way, a rally will be seen in all markets, accompanied by a weaker dollar. Forecasts for today: EUR/USD The pair is currently consolidating below 1.0655. If the Fed says positive statements, it could hit 1.0785. USD/CAD The pair is trading above the level of 1.3520. A rise in oil prices and a decline in dollar could take it to 1.3400.   Relevance up to 07:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329751
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Analysis Of The USD/CAD Pair's Situation

TeleTrade Comments TeleTrade Comments 15.12.2022 08:58
USD/CAD picks up bids to print the first daily gains in four, bounces off weekly low. Sluggish markets, rebound in US Treasury yields allow US Dollar to pare recent losses. WTI crude oil eases from one-week high as downbeat China data, higher interest rates probe oil bulls. USD/CAD extends recovery from weekly low to refresh intraday high near 1.3570 during the first positive day in four amid early Thursday. In doing so, the Loonie pair takes clues from the latest rebound in the US Dollar, as well as a pullback in Canada’s main export item, WTI crude oil. US Dollar Index (DXY) consolidates recent losses around 103.80 while bouncing off one-month-old support, as well as the six-month low, as traders turn cautious ahead of multiple central bank announcements. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM On the other hand, WTI crude oil snaps a four-day uptrend as it retreats from the weekly top to $76.70 amid fears of lesser demand due to downbeat China data and higher interest rates at the major central banks. Recently, China’s Retail Sales slumped to -5.9% in November versus -3.6% expected and -0.5% prior while Industrial Production came in at 2.2% compared to 3.3% market forecasts and 5.0% previous readings. Previously, OPEC and the International Energy Agency (IEA) forecasted a rebound in oil demand and joined the softer US Dollar to favor the energy bulls. The market’s reassessment of the Fed verdict, suggesting a 50 bps rate hike and readiness to hold the rate higher for a longer period, could be cited as a reason for the US Dollar’s latest recovery, as well as the USD/CAD pair’s upside. Against this backdrop, S&P 500 Futures remain mildly offered but the US 10-year Treasury bond yields probe a two-day downtrend near 3.50%. Further, the US two-year bond yields also extend recovery from the monthly low while printing the first daily positive in three near 4.25%. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Moving on, the second-tier data from Canada, mainly relating to housing and employment insurance, may entertain USD/CAD pair traders. However, major attention will be given to the monetary policy announcements from the Swiss National Bank (SNB), European Central Bank (ECB) and the Bank of England (BOE). Technical analysis Wednesday’s Doji candlestick above the 21-day Exponential Moving Average (EMA), at 1.3535 by the press time, keeps USD/CAD buyers hopeful of reaching the monthly high near 1.3700.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Outlook Of The Loonie Pair (US Dollar/Canadian Dollar)

TeleTrade Comments TeleTrade Comments 16.12.2022 09:08
USD/CAD seesaws around intraday low after reversing from 1.5-month-old resistance line. Recovery from 100-SMA joins bullish MACD signals, firmer RSI to suggest further advances. 200-SMA, monthly support line adds to the downside filters. USD/CAD picks up bids to pare intraday losses around 1.3640 during early Friday morning in Europe. In doing so, the Loonie pair reverses the early Asian session pullback from a six-week-old descending resistance line. That said, the quote’s bounce off the 100-SMA level, around 1.3530 by the press time, joins the bullish MACD signals and the firmer RSI (14), not overbought, to signal the USD/CAD pair’s further advances. Hence, the quote’s another battle with the aforementioned resistance line, near 1.3675 at the latest, can’t be ruled out. However, a clear upside break of the same, as well as a run-up beyond the monthly top of 1.3700, becomes necessary for the USD/CAD bull’s conviction. Following that, a run-up towards the previous monthly top surrounding 1.3810 can’t be ruled out. On the flip side, the 61.8% Fibonacci retracement level of the pair’s early November moves, near 1.3585, acts as immediate support to watch during the quote’s further downside. Additionally challenging the USD/CAD bears is an upward-sloping support line from mid-November and the 200-SMA, respectively around 1.3500 and 1.3480. To sum up, USD/CAD remains on the bull’s radar despite the loss on daily basis. USD/CAD: Four-hour chart Trend: Further recovery expected
"Global Steel Output Rises as Chinese Production Surges, Copper Market Remains in Deficit

There Will Probably A Rally Today And For The Remaining Two Weeks Until The End Of The Year

8 eightcap 8 eightcap 16.12.2022 09:55
Pressure returned on markets due to negative sentiment that followed the Fed's decision on interest rates. Most likely, players wanted to lock in gains on assets at more interesting prices, so even though the rate hike and latest economic statistics in the US were not surprising, they did their best to trigger a collapse, using recession fears as an excuse. Of course, it could also be because the Fed said they expected a slightly higher average interest rate level, but that was not new, as is the economic data that was lower than expected. Nevertheless, it is unlikely that yesterday's decline is a sign of a global reversal as an important leading indicator, which is US treasuries, did not show a strong increase. Stock markets are also beginning to grow since today's European session, and this may continue until the US trading session. It seems that the gold market is climbing as well, while dollar is declining smoothly. There will probably a rally today and for the remaining two weeks until the end of the year, which will not only recover yesterday's losses, but will also lead to a noticeable increase in risk appetite, accompanied by a weaker dollar. Forecasts for today: EUR/USD The pair halted at 1.0655, but stabilization in markets and increased drisk appetite could push it towards 1.0785. USD/CAD The pair is trading within the range of 1.3525-1.3700. If market sentiment improves, it could stay at 1.3525.   Relevance up to 08:00 2022-12-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330015
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Weaker crude oil worsens Canadian dollar situation

FXStreet News FXStreet News 16.12.2022 13:18
USD/CAD attracts some dip-buying on Friday and is supported by a combination of factors. Retreating oil prices undermines the Loonie and acts as a tailwind amid a modest USD uptick. A sustained move beyond the 1.3700 mark is needed to support prospects for additional gains. The USD/CAD pair reverses an intraday dip to the 1.3620-1.3615 area and hits a fresh weekly high during the mid-European session on Friday. Spot prices, however, struggle to capitalize on the move and remain below the 1.3700 mark, though the bias seems tilted in favour of bullish traders. Crude oil prices extend the previous day's retracement slide from over a one-week high and undermine the commodity-linked Loonie. This, along with the emergence of some US Dollar dip-buying, is seen acting as a tailwind for the USD/CAD pair. Investors seem worried that rapidly rising borrowing costs could lead to a deeper global economic downturn and dent fuel demand, which, in turn, is exerting pressure on the black liquid for the second straight day. The USD, on the other hand, draws support from a more hawkish commentary by the Federal Reserve and is looking to build on the overnight solid rebound from a six-month low. It is worth recalling that the US central bank signalled on Wednesday that it will continue to raise rates to crush inflation. This, in turn, triggers a further recovery in the US Treasury bond yields. Apart from this, the risk-off impulse offers additional support to the safe-haven buck. Read next: The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro| FXMAG.COM The prospects for further policy tightening by major central banks, along with recession fears, take its toll on the global risk sentiment. This is evident from a sea of red across the equity markets, which drives investors to take refuge in traditional safe-haven assets. The USD/CAD bulls, meanwhile, await a sustained strength beyond the 1.3700 round-figure mark before positioning for an extension of the upward trajectory witnessed over the past month or so. Traders now look forward to the US economic docket, featuring the release of the flash PMI prints for December. This, along with the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the USD/CAD pair. Apart from this, oil price dynamics should also contribute to producing short-term opportunities on the last day of the week.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The USD/CAD Pair's Short-Term Movements Seem To Be Limited

TeleTrade Comments TeleTrade Comments 19.12.2022 09:32
USD/CAD struggles to defend bears during the first daily loss in three. Oil price initially cheered hopes of China stimulus, softer US Dollar before latest consolidation. Inflation is the key but holiday mood could restrict short-term moves. USD/CAD consolidates intraday losses as it grinds higher around 1.3680, following a downbeat start to the week. That said, softer US Dollar and optimism surrounding Crude Oil seemed to have contributed to the Loonie pair’s first daily loss in three before the latest paring of moves amid a light calendar and mixed concerns. US Dollar Index (DXY) picks up bids from intraday low but prints 0.15% daily loss around 104.60 as traders struggle for clear directions. The reason could be linked to the hawkish Fedspeak and softer US PMIs for December. That said, Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams recently favored higher rates. On the other hand, the US S&P Global Manufacturing PMI dropped to 46.2 from 47.7 in November, as well as the market expectation of 47.7. Further, S&P Global Services PMI declined to 44.4 in December's flash estimate from 46.2 in November and market expectation of 46.8. It should be noted that the WTI crude oil prices, Canada’s main export retreats to $75.00 after an initial run-up to $75.93. Even so, the black gold snaps a two-day downtrend amid hopes of firmer demand from China and the US decision to buy back oil for its state reserves. On the contrary, global recession woes underpin the US Treasury yields and challenge equity traders. In addition to the mixed signals and holiday mood could also be held responsible for the USD/CAD pair’s latest moves. Moving on, the Bank of Canada's (BOC) Consumer Price Index (CPI) Core for November, expected 6.4% YoY versus 5.8% prior, will be important for the USD/CAD traders ahead of the Fed’s preferred version of inflation, namely Friday’s US Core Personal Consumption Expenditures (PCE) - Price Index, expected 4.6% YoY and 5.0% prior. Technical analysis A seven-day-old horizontal resistance area near 1.3700 inside a rising wedge bearish formation, established since early November, restricts short-term USD/CAD moves.
National Bank of Poland Meeting Preview: Anticipating a 25 Basis Point Rate Cut

According To Central Banks Tight Monetary Policy Will Continue In 2023

InstaForex Analysis InstaForex Analysis 19.12.2022 10:20
Volatility has been extremely high for financial markets last week due to the Fed, Bank of England and ECB meetings and the release of economic data. All of them caused sell-offs in risky assets, primarily because nothing new has happened and nothing substantial has been said. The ECB and the Fed raised interest rates as expected, while the latest statistics were in line with expectations. Most central banks also noted that tight monetary policy will continue in 2023. Basically, last week's events have brought back the expectations that a widespread recession could start as early as next year. This led to another stock market crash and a rise of dollar to recent highs. However, the decline is likely just a correction, not a full-scale downward trend as demand could return if market sentiment improves. That could also lead to a weaker dollar and more stable treasury yields during the last two weeks of the year. Forecasts for today: AUD/USD 0.6680 is a key support level in AUD/USD. If market sentiment improves today, the pair could bounce up to 0.6800, then go to 0.6915. USD/JPY Even if USD/JPY is bullish, a rise in risk appetite could prompt the pair to rebound to 138.00.   Relevance up to 06:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330121
The USD/CAD Pair Has The Strong Downside Momentum

Crude Oil Prices Significantly Affect The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 20.12.2022 09:14
USD/CAD picks up bids to reverse the week-start losses. US Dollar benefits from the BOJ-inflicted losses in bond, stock markets. Oil price weaken amid economic fears surrounding China. Canada Retail Sales, US housing data eyed for fresh impulse. USD/CAD clings to mild gains around 1.3700 as the US Dollar reverses the intraday losses heading into Tuesday’s European session. The Loonie pair’s run-up could also be linked to the downside move of Canada’s main export item, namely WTI crude oil. That said, the US Dollar Index (DXY) picks up bids to pare recent losses around 104.50 as the Treasury bond yields rally on the Bank of Japan’s (BOJ) surprise. Recently, the BOJ tweaked its policy to widen the Yield Curve Control (YCC) measures while keeping the monetary policy unchanged. Also underpinning the US Dollar’s latest rebound could be the economic fears surrounding China, as well as the globe. Behind the moves could be the World Bank’s cut in China’s economic forecasts as well as the hawkish actions of the major central banks to tame inflation, especially when the recession fears are already looming. However, comparatively less hawkish comments from the Fed officials join softer US PMIs to challenge DXY bulls. Elsewhere, WTI takes offers to refresh intraday low near $75.50, down half a percent at the latest. The European leaders’ agreement on the oil price cap for Russian energy exports also seems to exert downside pressure on the black gold prices. Amid these plays, S&P 500 Futures and the Asia-Pacific stocks print losses while the US 10-year Treasury yields rise for the third consecutive day to refresh the monthly peak near 3.70%, at 3.67% by the press time. Looking forward, the risk-aversion wave may help USD/CAD buyers ahead of the Canadian Retail Sales for October, expected -0.3% versus 0.5% prior. On the other hand, US Building Permits and Housing Starts for November may also direct short-term pair moves. Technical analysis A daily closing beyond the 1.3700 hurdle, comprising multiple tops marked in the last two weeks, becomes necessary for the USD/CAD bulls to aim for the previous monthly high near 1.3810. Otherwise, a pullback towards the 50-DMA support of 1.3557 can’t be ruled out.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Today's Release Has The Potential To Trigger Price Turbulence In The USD/CAD Pair

InstaForex Analysis InstaForex Analysis 21.12.2022 09:50
USD/CAD is falling this week, demonstrating a downtrend after five weeks of consecutive growth. So, the loonie was near 1.3250 in the beginning of November, but last Friday, the bulls tested the 37th figure. The 500-point march was accompanied by corrective pullbacks, but in general, the uptrend was clearly visible. Conflicting results on the Bank of Canada's December meeting only fueled the bullish sentiment. Despite the greenback's shaky position, the USD/CAD bulls were rising, eventually climbing to the 37th figure. But their confidence ran out in this price area. Obviously, the bulls need a source of information to boost them so they can work on a bullish attack. However, bears also need some informational boost to develop a bearish pullback to 1.3550 (upper limit of the Kumo cloud on D1), and then to 1.3460 (lower limit of this cloud on the same chart). Today's report may "rattle" the pair. At the start of Wednesday's U.S. trading session, Canada will release key data on the country's inflation growth. And in light of the controversial results of the Bank of Canada's December meeting, this report is particularly significant to the Loonie. Two weeks ago, the Canadian central bank raised its interest rate by 50 basis points. Bank of Canada Governor Tiff Macklem lamented the high inflation rate and positively assessed the dynamics of the national economy growth in the third quarter. On the one hand, the formal results of the December meeting were in favor of the Canadian dollar. On the other hand, a closer look at these results suggests opposite conclusions. By the way, the Canadian dollar reacted negatively to the stance of the accompanying statement, falling in many currency pairs. And here's why. Behind the central bank's statement that inflation in Canada is still at an unacceptably high level is an inherently opposite clarification. The Bank of Canada said in an accompanying statement that the three-month rates of change in core inflation have come down - and according to central bank economists, this is "an early indicator that price pressures may be losing momentum." In other words, the central bank saw the first signs of a slowdown in inflationary growth, with all the consequences that this implies. In fact, the possible consequences of a further decline in inflation are also mentioned in the text of the final communique. The phrase in question is worth quoting in full: The "Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target". Such preceding statements add value to an already significant macro report. This suggests that today's release has the potential to trigger price turbulence in the USD/CAD pair, especially if the final numbers deviate from projections. Let me remind you that in October, the core consumer price index (which excludes volatile food and energy prices), in annualized terms, declined to 5.8% from the previous 6% value. Instead of a decline, most experts expected an increase to 6.3%. According to preliminary forecasts, the downtrend will develop in November. Thus, according to the majority of experts, the core CPI will come out at 5.6% (y/y): this could be the weakest growth rate of the indicator since March 2022. As for overall inflation, a decline in indicators is also expected - both in monthly and annual terms. In particular, in monthly terms, the index should decline into negative territory (-0.1%) after growth to 0.7% in October. On a year-on-year basis, the index is likely to come out at 6.6% (the weakest growth rate since February of this year). As we can see, the forecasts are rather weak, so if the report turns out to be in the red zone, the Canadian dollar will be under a lot of pressure. In such a case, the pair might retest the 37th figure again, updating the current week's high (1.3702). Take note that the resistance level is slightly higher, at 1.3760 (the upper line of the Bollinger Bands indicator on the daily chart), so the USD/CAD bulls have a good chance to break through the 37th figure, if the current inflation report turns out to be a disappointment. However, an alternative scenario is also possible: if the report is in the green zone, the bears could develop a bearish rollback to 1.3550 (Kumo cloud upper limit at D1) and then to 1.3460 (Kumo cloud lower limit on the same chart). At the moment, it would be best to maintain a wait-and-see attitude on the pair: the inflation report will determine the price movement vector in the medium term. Relevance up to 12:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330374
The USD/CAD Pair Has The Strong Downside Momentum

Analysis And Outlook Of The USD/CAD Pair Situation

TeleTrade Comments TeleTrade Comments 22.12.2022 09:45
USD/CAD holds lower grounds near intraday bottom, prints four-day downtrend. Cautious optimism, downbeat Treasury yields weigh on US Dollar. WTI seesaws near 13-day high amid hopes of more demand on winter, travel concerns. USD/CAD takes offers to refresh intraday low near 1.3580 during early Thursday morning in Europe. In doing so, the Loonie pair drops for the fourth consecutive day while extending the previous day’s downside break of a short-term key support trend line toward another support line. That said, the quote’s latest weakness could be linked to the broad US Dollar weakness, as well as firmer prices of WTI crude oil, Canada’s main export item. It should be noted that the mixed prints of Canada inflation data failed to recall USD/CAD buyers the previous day. US Dollar Index (DXY) drops half a percent to around 103.85 at the latest as the US 10-year Treasury yields remain depressed at around 3.65%, extending the previous day’s pullback from the monthly high. WTI crude oil prints mild losses as it pares the daily gains around $78.40. Even so, hopes of more energy demand due to fierce winter and more travel forecasts keep the black gold positive on a weekly basis. On Wednesday, Canada’s Consumer Price Index (CPI) declined to 6.8% YoY in November from 6.9% in October, versus market forecasts of 6.7%. Further, the more important reading of inflation, namely the Core Bank of Canada (BOC) CPI, which excludes volatile food and energy prices, remained unchanged at 5.8% YoY. It should be noted that the Bank of Japan’s (BOJ) second unscheduled bond-buying joins the cautious optimism in the market, as portrayed by mildly bid stock futures and Asia-Pacific equities, also exert downside pressure on the USD/CAD prices. Bloomberg cites China’s State Council and the People’s Bank of China (PBOC) to hint at more positives for the dragon nation and revives the market’s optimism of late. “China’s State Council, People’s Bank of China (PBoC) and the country’s top securities regulator jointly conducted a study during last week’s economic policy meeting, aiming to prioritize growth and boost the property market in 2023,” reported Bloomberg. Alternatively, news suggesting China’s biggest budget deficit on record, for the January-November period, joins the Russia-Ukraine woes to probe the USD/CAD bears. Looking forward, final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis A clear downside break of the two-week-old ascending trend line, around 1.3630 by the press time, directs USD/CAD bears towards an upward-sloping support line from November 15, close to 1.3540 at the latest.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Remains Depressed Heading Into The European Session

TeleTrade Comments TeleTrade Comments 23.12.2022 09:07
USD/CAD comes under some renewed selling pressure on Friday amid a modest USD downtick. A recovery in global risk sentiment is seen weighing the safe-haven buck and exerting pressure. Hawkish Fed expectations should limit the USD fall and lend support ahead of the US PCE data. The USD/CAD pair struggles to capitalize on the previous day's goodish rebound from a one-week low and meets with a fresh supply on Friday. The pair remains depressed heading into the European session and is currently placed near the lower end of its daily range, around the 1.3630-1.3625 region. A modest recovery in the US equity futures prompts some selling around the safe-haven US Dollar, which, in turn, is seen as a key factor weighing on the USD/CAD pair. The USD downtick, however, is likely to remain limited amid reviving bets for a more aggressive policy tightening by the Fed, bolstered by the upbeat US macro data released on Thursday. In fact, the US GDP growth for the third quarter was revised higher to show that the economy expanded by 3.2%, faster than the 2.9% estimated previously. Adding to this, the number of Americans filing new claims for unemployment-related benefits increased less than expected during the week ended December 17, pointing to a still-tight labour market. The resilient US economy could allow the Fed to continue raising borrowing costs, which, in turn, continues to act as a tailwind for the US Treasury bond yields and favours the USD bulls. Meanwhile, subdued action around crude oil prices fails to provide any impetus to the commodity-linked Loonie and could further lend support to the USD/CAD pair. Traders, however, might refrain from placing aggressive bets and prefer to wait on the sidelines ahead of Friday's release of the US Personal Consumption Expenditure (PCE) data. The Core PCE Price Index - the Fed's preferred inflation gauge - will be looked upon for fresh cues on inflation and influence the US central bank's decision on future rate hikes. This, in turn, will play a key role in driving the USD demand in the near term and provide some meaningful impetus to the USD/CAD pair on the last day of the week. Apart from this, oil price dynamics should further contribute to producing short-term trading opportunities around the major.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Canadian inflation report was mixed but there is a strong likelihood that the BoC will raise rates by 25bp

Kenny Fisher Kenny Fisher 23.12.2022 13:26
The Canadian dollar has edged lower on Friday. In the European session, USD/CAD is trading at 1.3600, down 0.33%. We could see stronger movement from the Canadian dollar in the North American session, with key events in both Canada and the US. Canada releases GDP for October, with a forecast of a weak gain of 0.1% m/m. This would be unchanged from September GDP. Canadian consumers have been holding tighter to the purse strings and saving their hard-earned money, as wage growth has failed to keep pace with inflation. The decline in consumer spending has hurt economic growth and there are worrying signs that economic growth has stalled in the fourth quarter. In the US, the week wraps up with a host of events. The markets will be paying particular attention to the PCE Core Index, the Fed’s preferred interest indicator. The index is expected to slow to 4.6% y/y in November, down from 5.0% a month earlier. Personal Spending and Personal Income are also expected to soften. The US also releases durable goods, UoM consumer confidence and UoM inflation expectations. GDP revised upwards, jobless claims beat forecast The US dollar received a lift on Thursday, thanks to some solid US data. Unemployment claims rose to 216,000, up from 214,000, but investors liked that the reading was lower than the consensus of 222,000. As well, GDP for Q3 was revised upwards to 3.2%, up from 2.9% in the initial estimate. The strong data is another indication that the Federal Reserve needs to maintain its aggressive tightening stance, which has raised the likelihood of higher-for-longer rates. The markets were hoping that Thursday’s Canadian inflation report would provide clues about BoC rate policy, but inflation was mixed. Headline CPI slowed to 6.8%, down from 6.9%, while two core indicators rose slightly. It appears too early to determine if inflation is headed lower, and as thing stands, there is a strong likelihood that the BoC will raise rates by 25 basis points at its January meeting.   USD/CAD Technical There is resistance at 1.3640 and 1.3762 1.3576 and 1.3484 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Oil Prices Have Extended Their Upside Journey And Support The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 27.12.2022 09:15
USD/CAD has surrendered the previous week’s low around 1.3560 amid weakness in the US Dollar Index. A decline in the US PCE and US Durable Goods Orders data has cemented expectations for lower inflation ahead. An increment in oil prices led by supply worries on expected cuts from Russia has supported the Canadian Dollar. USD/CAD is expected to deliver more weakness below 1.3550 amid a Double Top formation. USD/CAD has witnessed a steep fall after surrendering the previous week’s low around 1.3560 in the early European session. The Loonie has dropped to near 1.3550 and is expected to display more weakness as the US Dollar Index (DXY) has faced immense pressure led by a decline in the United States Personal Consumption Expenditure (PCE) Price Index data released on Friday. The US Dollar Index has turned sideways in a 103.60-103.80 range after a gap down open. The appeal for the USD Index has been trimmed led by upbeat market sentiment. A significant decline in the consumption expenditure by households in the United States economy has improved the risk appetite of the market participants. Meanwhile, S&P500 futures have extended their gains after a firmer revival on Friday. A sheer drop in the consumption expenditure and the United States Durable Goods Orders data has provided comfort to the US equities. The return on 10-year US Treasury bonds is hovering around 3.74%. A decline in US PCE favors further inflation softening Federal Reserve (Fed) chair Jerome Powell and his teammates are putting their blood and sweat into achieving price stability in the United States economy. Inflation is still roaring, however, a gradual slowdown in the inflationary pressures on a recurring basis is delighting the Fed policymakers. The headline PCE dropped to 5.5% while the street was expecting a drop of 5.3% but remained significantly lower than the former release of 6.1%. While the core PCE Price Index remained in line with the estimates of 4.7% and lower than the prior release of 5.0%. This has cemented expectations of further decline in the United States inflation ahead. Consumption expenditure by households is a critical inflation indicator and a decline in the same is going to force the producers to curtail prices of goods and services at factory gates.   US Durable Goods Orders contraction favors less-hawkish Federal Reserve policy Apart from the decline in the United States PCE data, the catalyst that has impacted the US Dollar Index is the decline in the demand for Durable Goods. The US Durable Goods Orders have contracted by 2.1% against the consensus of a 0.6% contraction. A decline in demand for Durable Goods indicates a further drop in the core inflation measures as a slowdown in demand is critical for softening inflation in the economy. This may compel the Federal Reserve to go light on the interest rates by looking for a smaller rate hike. Also, a continuous decline in the overall demand could result in a lower interest rate peak by the Fed. Oil prices above $80.00 support the Canadian Dollar Oil prices have extended their upside journey and have crossed the psychological hurdle of $80.00 on escalating supply worries after Russia warned of supply cuts to offset the price cap imposed by G7 nations along with the European Union. According to Russia’s Deputy Prime Minister Alexander Novak, Moscow may cut its oil output by 500,000-700,000 barrels a day in early CY2023. Earlier, the G7 levied a price cap on Russian oil supply at $60/barrel to weaken its income for funding arms and ammunitions requirement for war with Ukraine. It is worth noting that Canada is a leading exporter of oil to the United States and higher oil prices support the Canadian Dollar. USD/CAD technical outlook USD/CAD has witnessed a steep fall after forming a Double Top chart pattern on an hourly scale. The Loonie asset witnessed a steep fall while attempting to surpass the crucial resistance of 1.3700 with less enthusiasm and zeal. The major is expected to display sheer downside if it surrenders the crucial support placed from December 14 low around 1.3520. The 50-and 200-period Exponential Moving Averages (EMAs) at 1.3615 have delivered a death cross, which indicates more weakness in the Lonnie asset ahead. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which signals that the downside momentum has been triggered.     search   g_translate    
The USD/CAD Pair Is Likely To Remain Sidelined

The USD/CAD Pair Is Likely To Remain Sidelined

TeleTrade Comments TeleTrade Comments 28.12.2022 08:55
USD/CAD grinds near intraday high after bouncing off three-week low. US Dollar rebound, easing optimism over China’s Covid updates weigh on Oil price. Holiday season, light calendar restricts immediate moves but firmer US Treasury yields keep USD/CAD buyers hopeful. USD/CAD prints mild gains around 1.3530 as bulls and bears jostle during the first positive day for the Loonie pair in three. The US Dollar rebound and the recent pullback in the Oil prices could be linked to the quote’s recovery. However, the holiday mood and a light calendar, not to forget fewer macros, keep the USD/CAD traders in check. US Dollar Index (DXY) struggles to defend recent gains around 104.25, fading the bounce off a one-week low, amid sluggish US Treasury bond yields. In doing so, the greenback’s gauge versus the six major currencies also justifies the recently mixed US data, as well as mixed concerns surrounding the Fed’s next moves. Even so, receding fears of the US recession and easing optimism surrounding China’s Covid conditions seem to keep the DXY bulls hopeful. Recently, a Researcher from the Federal Reserve Bank of San Francisco’s Economic Research Department ruled out odds favoring the US economic slowdown for at least the upcoming two quarters. That said, US Good Trade Balance for November improved to $-83.3B versus $98.8B prior but the US S&P/Case-Shiller Home Price Indices for October dropped to 8.6% YoY versus 9.7% expected and 10.4% previous readings. In the last week, mixed readings of the US inflation and growth figures raised doubts about the Federal Reserve’s (Fed) hawkish move, especially after the US central bank appeared cautiously optimistic in its latest monetary policy meeting. On a different page, China announced multiple measures to open national and international boundaries in a rush to convey the easing of COVID-19 fears. However, the US doubts the moves and probes the risk-on mood. The dragon nation initially ruled out the quarantine requirement for inbound travelers before stating that the nation will resume citizens' applications for ordinary passports for tourism and visits abroad from January 8, 2023. Even so, a US Official mentioned, per Reuters, that the US government may impose new COVID-19 measures on travelers to the United States from China over concerns about the "lack of transparent data" coming from Beijing. Against this backdrop, the US Treasury yields remain stable while the stock futures print mild gains and the WTI crude oil extends the previous day’s pullback from a three-week high, down 0.22% intraday near $79.60 at the latest. Given the market’s actions, as well as the light calendar and no major macros, the USD/CAD is likely to remain sidelined. It should be noted that the US Pending Home Sales for November which holds the market consensus of 0.6% versus -4.6% previous readings, will decorate the calendar. Technical analysis USD/CAD recovers from the 200-SMA, around 1.3500 by the press time, as the RSI (14) defends recovery from the oversold territory. Also supporting the Loonie pair’s rebound is the receding strength of the bearish MACD signals. As a result, the USD/CAD rebound is likely to approach the 1.3570 resistance confluence including the one-week-old descending resistance line, as well as the previous support line from November 15.
The USD/CAD Pair Has The Strong Downside Momentum

The USD/CAD Pair Is Likely To Extend The Latest Weakness

TeleTrade Comments TeleTrade Comments 29.12.2022 09:08
USD/CAD renews intraday low while paring the biggest daily jump in a fortnight. Convergence of 100-SMA, previous support line from mid-November challenge upside moves. 200-SMA appears a tough nut to crack for the bears. USD/CAD takes offers to refresh intraday low around 1.3580 as it pares the biggest daily gains in two weeks heading into Thursday’s European session. In doing so, the Loonie pair extends the day-start pullback from the 1.3615 resistance confluence despite bullish MACD signals. That said, the 200-Simple Moving Average (SMA) joins the support-turned-resistance line from November 15 to highlight the 1.3615 level as the key hurdle. Given the quote’s recent pullback from the stated resistance, a pullback towards the mid-December swing low near 1.3520 can’t be ruled out. However, the 200-SMA level of 1.3507 and the 1.3500 round figure could challenge the USD/CAD bears afterward. In a case where the Loonie pair drops below the 1.3500 round figure, the monthly low of 1.3385 will be in the spotlight. Alternatively, recovery moves need to portray successful trading beyond the 1.3615 key resistance to convince the USD/CAD buyers. Even so, a one-week-old descending trend line near 1.3655 could challenge the quote’s further upside before directing the bulls toward the monthly peak of 1.3705. To sum up, the USD/CAD pair is likely to extend the latest weakness but the room towards the south appears limited. USD/CAD: Four-hour chart Trend: Limited downside expected  
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Loonie Pair (USD/CAD) Is Displaying A Lackluster Performance In The Face Of Indecision In Global Markets Regarding Inflation Forecasts For 2023

TeleTrade Comments TeleTrade Comments 30.12.2022 09:34
USD/CAD is displaying a sideways profile around 1.3550 as investors are avoiding building positions amid the festive season. Federal Reserve might continue its hawkish policy as the street sees inflation well above 3% in CY2023. The US Dollar witnessed selling pressure after the release of additions in the weekly Initial Jobless Claims. USD/CAD is likely to continue its rangebound structure amid the unavailability of any major economic event. USD/CAD is displaying a sideways performance in the early European session as investors are hesitating in building positions ahead of the long weekend. The Loonie asset is displaying a lackluster performance in a narrow range around 1.3550 amid indecisiveness in the global markets towards inflation projections for CY2023. The risk-perceived currencies are failing to capitalize on the improved risk appetite of investors after Thursday’s action. S&P500 displayed a firmer recovery after investors saw value-buying in the equities domain of the United States. In early Friday, S&P500 futures are holding their Thursday gains but are failing to extend their recovery further. It seems that investors are preferring to go light in CY2023 as volatility could heat up. The US Dollar Index (DXY) is struggling to extend its gains above the immediate resistance of 103.70 after a recovery attempt from 103.50. The USD Index has been oscillating in a bounded range of 103.50-104.60 since Monday. Meanwhile, caution in the market is supporting the 10-year US Treasury yields. The return in 10-year US Treasury bonds is holding above 3.83%. A rise in weekly jobless claims impacted the US Dollar The US Dollar Index witnessed selling pressure on Thursday after the United States Department of Labor (DoL) reported an increase in the number of individuals applying for jobless claims for the very first time. The economic data landed at 225K for the week ending December 23, higher than the former release of 216K. The impact of higher interest rates by the Federal Reserve (Fed) has forced the firms to pause the recruitment process. Firms have halted the employment creation process as the street sees bleak economic growth amid expectations of the continuation of extremely hawkish monetary policy by the Federal Reserve. This led to a surge in jobless claims. Street sees no achievement of the Fed’s 2% inflation target in 2023 In CY2022, the agenda of the Federal Reserve chair Jerome Powell and his teammates has remained the achievement of price stability. Federal Reserve policymakers continuously hiked interest rates to squeeze the supply of the US Dollar into the economy. No doubt, the central bank managed to drag the headline Consumer Price Index (CPI) from its peak of 9.1% but the road to recovery is far from over. Economists at TD Securities are of the view that inflation in the United States will remain well above 3% by the end of Q4 2023. “We look for headline inflation to end the year at a robust 7.1% YoY pace in Q4, but to slow to 3.1% in Q4 2023. We also forecast Core CPI inflation to end the year at a still-high 6.0% but to decelerate to 3.3% in Q4 2023.” Also, in the opinion of economists at Deutsche Bank “Headline inflation seems to have already peaked in the United States.” However, it will still be well above the target set by the Fed in 2023. Oil price struggles to recapture $80.00 China’s Covid-19 status is getting vulnerable each day as the number of infections are rising dramatically.  Also, death numbers are scaling higher as medical facilities are unable to address each infected individual. This has also forced various nations to demand negative Covid reports of arrivals from China in order to safeguard themselves from the pandemic. The street is in a dilemma whether to support oil prices by considering optimism over the reopening of the Chinese economy or to consider the short-term pain due to supply chain disruptions. The oil price has rebounded after dropping to near $77.00 but is struggling to recapture the crucial hurdle of $80.00. It is worth noting that Canada is a leading oil exporter to the United States and higher oil prices might support the Canadian Dollar. USD/CAD technical outlook USD/CAD has shifted its auction profile below the upward-sloping trendline placed from November 16 low at 1.3228 on a four-hour scale. The Loonie asset is hovering below the 200-period Exponential Moving Average (EMA) around 1.3550. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range. A slippage of the momentum oscillator inside the bearish range of 20.00-40.00 will trigger a bearish momentum.
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

TeleTrade Comments TeleTrade Comments 02.01.2023 08:36
USD/CAD reverses from intraday low, probes the previous daily loss. Convergence of 200-SMA, three-day-old ascending trend line restricts immediate downside. Bulls remain off the table unless crossing the previous support line from November. Downbeat RSI line, sustained trading below key trend line, SMA favor sellers. USD/CAD takes a U-turn from the intraday low while picking up bids to 1.3560 amid the holiday-thinned trading session on Monday. In doing so, the Loonie pair bounces off the convergence of the 200-SMA and an upward-sloping support line from the last Wednesday. That said, the quote’s failure to stay beyond the support-turned-resistance line from November 15, following the previous week’s bounce off the 200-SMA, joins sustained trading below the 50-SMA to keep USD/CAD sellers hopeful. As a result, the Loonie pair is likely to conquer the 1.3520 support level and aim for the 1.3500 round figure. However, the double bottom around 1.3485, marked in the last week, will be crucial for the USD/CAD bears to keep the reins. Following that, the previous monthly low of around 1.3385 could lure the pair sellers ahead of November’s bottom surrounding 1.3225. Meanwhile, the pair’s recovery moves could aim for the weekly resistance line, around 1.3570, before poking the 50-SMA level surrounding 1.3580. Though, successful trading beyond the 1.5-month-old support-turned-resistance line, close to 1.3610 at the latest, becomes necessary for the USD/CAD bulls to retake control. Overall, USD/CAD is likely to remain on the bear’s radar unless even as the downside room is limited. USD/CAD: Four-hour chart Trend: Further downside expected    
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Lonnie Pair (USD/CAD) Is Expected To Extend Its Downside Journey

TeleTrade Comments TeleTrade Comments 03.01.2023 08:56
USD/CAD has displayed an A-shape sell-off as investors have shrugged off China’s Covid-inspired uncertainty. FOMC minutes will provide cues about the monetary policy outlook for CY2023. The Loonie bulls are likely to dance to the tunes of Canada’s employment data. The USD/CAD pair has displayed a perpendicular downside move after testing the previous week’s high around 1.3606 in the early Asian session. The Lonnie asset has dropped vigorously to near 1.3545 and is expected to extend its downside journey as the risk-averse theme has lost its traction. A value-buying context in the S&P500 futures has made the market mood cheerful in the Asian session. Also, risk-perceived currencies have gained positive traction. Meanwhile, the US Dollar Index (DXY) has turned sideways after a sheer drop to near 103.15. The USD index is hovering near its crucial support, therefore, sheer volatility is expected from the counter ahead. Investors are shifting their focus toward the minutes of the Federal Open Market Committee (FOMC), which will release on Thursday, as it will disclose the rationale behind hiking the interest rates by 50 basis points (bps) and pushing them to 4.25%-4.50%. Federal Reserve (Fed) chair Jerome Powell has already cleared that interest rates will peak around 5.1%. Inflationary pressures in the United States are extremely stubborn, therefore, investors should expect the continuation of higher interest rates straight to the end of CY2023. Meanwhile, Loonie investors are awaiting the release of Friday’s employment data. The Bank of Canada (BoC) may continue facing troubles as wage prices are escalating in the economy. Higher employment bills will keep inflation at elevated levels and may force BOC Governor Tiff Macklem to tighten policy further. On the oil front, oil price are struggling to sustain above $80.00 as the street is expecting an increase in the number of Covid-19 infections ahead. Analysts at Capital Economics have warned that "China is entering the most dangerous weeks of the pandemic".
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Loonie Pair (UAD/CAD) Is Likely To Face Barricades Around The Horizontal Resistance

TeleTrade Comments TeleTrade Comments 04.01.2023 09:14
The risk-off market mood in global markets has strengthened the US Dollar, A bull cross, represented by the 20-and 50-EMAs at 1.3578, indicates more upside ahead. The RSI (14) has jumped into the bullish range of 60.00-80.00, which supports the Greenback. The USD/CAD pair has dropped to near 1.3636 in the Asian session after multiple failed attempts of breaking above the critical resistance of 1.3680. The US Dollar Index is delivering a subdued performance as investors are restricting themselves from making potential positions before the release of the United States ISM Manufacturing PMI data. Meanwhile, S&P500 futures are attempting to recover after a two-day sell-off, however, the resilience in recovery is still missing, which indicates that the risk profile is still negative. Investors should note that the trend has turned bullish on a four-hour scale after remaining topsy-turvy for a long period. The Loonie asset is likely to face barricades around the horizontal resistance plotted near the round-level hurdle of 1.3700. A bull cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 1.3578, indicates more upside ahead. Meanwhile, the Relative Strength Index (RSI) (14) has jumped into the bullish range of 60.00-80.00, which indicates more upside ahead. A decisive break above the December 16 high around 1.3700 will strengthen the US Dollar and will drive the Loonie asset toward October 25 high at 1.3748 and November 3 high at 1.3808. On the contrary, the major could drop to November 23 high at 1.3440 after surrendering the psychological support of 1.3500. Later on, a slippage below 1.3440 will expose the Loonie asset for more downside towards December 5 low at 1.3385. USD/CAD four-hour chart  
The USD/CAD Pair Has The Strong Downside Momentum

A Softer Risk Tone Is Seen Pushing The USD/CAD Pair Higher

TeleTrade Comments TeleTrade Comments 05.01.2023 09:25
USD/CAD defends 100-day SMA and rebounds from a one-month low touched on Thursday. Looming recession risks weigh on investors’ sentiment and benefit the safe-haven greenback. An uptick in oil prices could underpin the Loonie and cap any meaningful gains for the major. The USD/CAD pair attracts some buyers in the vicinity of the 100-day SMA support and stages a modest bounce from a one-month low touched earlier this Thursday. The pair sticks to its intraday recovery gains through the early European session and is currently placed just above the 1.3500 psychological mark. A softer risk tone assists the safe-haven US Dollar to regain some positive traction, which, in turn, is seen pushing the USD/CAD pair higher. Despite the easing of strict COVID-19 curbs in China, concerns about a deeper global economic downturn continue to weigh on investors' sentiment and keep a lid on any optimism in the markets. That said, a combination of factors might hold back the USD bulls from placing aggressive bets and cap the upside for the major, at least for the time being. Read next:Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM The minutes of the December FOMC policy meeting showed that officials unanimously supported raising borrowing costs at a slower pace. The prospect for smaller rate hikes by the Fed is reinforced by the fact that the US Treasury bond yields remain within the striking distance of a three-week low touched on Wednesday. This should act as a headwind for the USD. Apart from this, an uptick in crude oil prices might underpin the commodity-linked Loonie and warrants caution for the USD/CAD bulls. Traders now look to the US economic docket, featuring the release of the ADP report on private-sector employment and the usual Weekly Initial Jobless Claims. This, along with the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the USD/CAD pair. Apart from this, oil price dynamics could contribute to producing short-term trading opportunities. The focus, however, remains on monthly employment details from the US and Canada, due on Friday.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Favoring The USD/CAD Bears Could Be The Challenge For The Federal Reserve

TeleTrade Comments TeleTrade Comments 09.01.2023 08:58
USD/CAD drops to the lowest levels in one month as bears keep the reins. China reopening, challenges for Fed hawks underpin risk-on mood. Oil price grinds higher amid softer US Dollar, hopes of more energy demand from China. Upbeat Canada jobs report versus mixed US data adds strength to the bearish moves. USD/CAD bears occupy the driver’s seat as the Loonie pair slides to the lowest levels in a month heading into Monday’s European session. In doing so, the quote takes clues from the market’s upbeat sentiment, as well as firmer prices of Canada’s main export item WTI crude oil. That said, WTI crude oil buyers poke $75.00 amid expectations that the China-inspired global optimism could tame the recession fears and inflate the energy demand. Also likely to have favored the black gold prices could be the downbeat US Dollar and geopolitical fears surrounding Russia. Elsewhere, China’s reopening of the international borders after a three-year blockage bolstered the market’s optimism. Also favoring the risk appetite could be comments from the People’s Bank of China (PBOC) Official who hinted at robust growth expectations from the dragon nation. Additionally favoring the USD/CAD bears could be the challenge for the Federal Reserve (Fed) hawks, especially after the latest US data.  On Friday, United States Nonfarm Payrolls (NFP) rose by 223,000 in December compared to the market expectations of 200,000 and November's increase of 256,000 (revised from 263,000). Further details of the US December jobs report revealed that the Unemployment Rate declined to 3.5% from 3.6% in November and 3.7% expected. More importantly, the Average hourly earnings rose 0.3% in December versus 0.4% prior while the YoY figures eased to 4.6% from 4.8% in November. Further, US ISM Services PMI slumped to the lowest levels in 31 months while suggesting a contraction in activities with 49.6 figures for December, versus the market expectations of 55 and 56.5 marked in November. On the same line, US Factory Orders also slumped, falling 1.8% in November after gaining 0.4% in October. On the other hand, Canada’s Net Change in Employment rose by 104K in December versus 8K expected and 10.1K prior while the Unemployment Rate dropped to 5.0% during the stated month, compared to 5.2% market forecasts and 5.1% previous readings. Despite the mixed readings of the key US data, Atlanta Federal Reserve bank president Raphael Bostic stated that the US economy is definitely slowing, which in turn drowned the key US Treasury bond yields and the US Dollar. That said, the US 10-year Treasury yields dropped 16 basis points (bps) to 3.56%, the lowest levels in three weeks, whereas the US Dollar Index (DXY) marked the biggest daily slump since November 11. Against this backdrop, Wall Street closed with notable gains and helps the S&P 500 futures to remain firmer, which in turn exerts downside pressure on the US Dollar and favors Oil prices. Moving on, Thursday’s US inflation data will be crucial for the USD/CAD pair traders while today’s Canadian Building Permits and Tuesday’s speech from Bank of Canada (BOC) Governor Tiff Macklem could offer intermediate directions. Technical analysis A clear downside break of the 100-DMA, around 1.3480 by the press time, directs the USD/CAD bears towards the 1.3230-25 support zone comprising a seven-month-old ascending trend line and multiple levels marked since July 2022.
The USD/CAD Pair Has The Strong Downside Momentum

The Canadian Dollar (CAD) Surged On The Strong Employment Report

Kenny Fisher Kenny Fisher 09.01.2023 13:22
The Canadian dollar has extended its gains on Monday, after climbing close to 1% on Friday. In the European session, USD/CAD is trading at 1.3396, down 0.35%. Canada creates over 100K jobs The final employment report of 2022 was a winner. The Canadian economy surprised with a massive gain of 104,000 jobs, crushing the estimate of 8,000 and up from the November reading of 10,100. The unemployment rate ticked lower to 5.0%, below the estimate of 5.2% and the prior read of 5.1%. The Canadian dollar surged on the strong employment report as well as mixed US numbers, as the nonfarm payrolls was decent but wages and the Services PMI were soft. Canada’s superb job numbers could play a key factor in the Bank of Canada’s rate decision on January 25th as a 25-basis point increase appears more likely. The markets have priced in a 75% likelihood of a 25 bp move, up from 64% prior to the release. Three of Canada’s major banks are saying they are also expecting a 25-bp increase, which would bring the cash rate to 4.5%. There are two key events next week which could provide clues on what the BoC has planned at its next meeting – the BoC Business Outlook Survey and the December inflation report. BoC Governor Macklem has said that future rate hikes will be data-dependent and the central bank and investors will be closely watching the inflation release. In the US, nonfarm payrolls came in at 223,000, down from 256,000 but above the estimate of 203,000. This was a decent release, but investors focussed on the bad news. Average hourly earnings rose 4.6%, well off the 5.0% estimate and shy of the prior reading of 4.8%. As well, the ISM Services PMI fell into contraction territory for the first time since May 2020. The index slipped to 49.6, down sharply from 56.5 and the forecast of 55.5. A reading below the 50.0 threshold separates contraction from expansion.  The drop in wages and weak services data indicate that the US economy is slowing and is likely to tip into recession. This could force the Fed to ease up on its pace of rate hikes, and as a result, the US dollar was broadly lower on Friday. Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM USD/CAD Technical There is resistance at 1.3522 and 1.3609 1.3358 and 1.3271 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Canadian Dollar Is Likely To Remain On Tenterhooks

The Canadian Dollar Is Likely To Remain On Tenterhooks

TeleTrade Comments TeleTrade Comments 10.01.2023 09:03
USD/CAD is displaying back-and-forth moves, following the footprints of the US Dollar Index. Federal Reserve Powell’s speech has become critical after a decline in US economic activities and wage inflation. Bank of Canada Macklem’s speech could be hawkish after upbeat December employment data. USD/CAD may remain in the grip of bears on a broader note amid declining 20-and 50-EMAs. USD/CAD is struggling to extend its recovery move from 1.3350 above the immediate resistance of 1.3400 in the early European session. The Loonie asset is displaying a sideways auction as investors are awaiting speeches from Federal Reserve (Fed) chair Jerome Powell and Bank of Canada (BoC) Governor Tiff Macklem for fresh cues. The market mood has turned risk-averse amid selling interest in risk-perceived assets like S&P500 futures. The 500-stock basket futures have continued their late Monday sell-off mood in the Asian session. Also, a rebound in the 10-year U Treasury yields to near 3.54% has weighed on investors’ risk appetite. The US Dollar Index (DXY) is displaying a lackluster performance below the critical resistance of 103.00 as investors have preferred to remain quiet ahead of the speeches. Federal Reserve Powell’s speech hogs limelight The speech from Federal Reserve Powell, which is scheduled for Tuesday, carries significant traction. Investors expect that soaring recession fears led by a slowdown in Services and Manufacturing PMI in the United States and a constructive decline in December’s Average Hourly Earnings might impact the methodology yet designed by Fed Powell and his teammates to combat stubborn inflation. However, other Fed policymakers are still solid on their prior views. On Monday, San Francisco Fed Bank President Mary Daly dictated that December wage data was one month of data, which can't be declared as a victory. It's too soon to declare victory and stop further interest rate hikes. To tame stubborn inflation, it is reasonable for interest rates to be at 5%-5.25%. Also, Atlanta Fed bank president Raphael Bostic sees interest rate peak in at 5%-5.25%. He further added that the Federal Reserve will continue keeping higher interest rates active into CY2024. United States Inflation- a key trigger ahead This week, the show-stopper event will be the United States Consumer Price Index (CPI) data, which will release on Thursday. Considering a firmer drop in wage inflation and a decline in the extent of economic activities, the inflation rate is expected to continue its declining spree. According to Bloomberg, the Labour Department’s CPI is expected to show core inflation at 5.7% from the former release of 6.0%. In the opinion of Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, the US Dollar could stay resilient even with a soft reading. “The majority of analysts polled by Bloomberg expect that consumer prices will not have risen in December. If that turns out to be correct, we could bet on everything being priced in, with the Dollar not coming under pressure. However, I am not so sure.” Bank of Canada Macklem’s speech to provide further assistance The Canadian Dollar is likely to remain on tenterhooks as Bank of Canada Governor Tiff Macklem will deliver a speech on Tuesday. After the release of stronger-than-expected Employment Change and a decline in the Unemployment Rate to 5.0% from the consensus of 5.2% last week, market participants believe that this might escalate wage discussions among firms and job seekers. Bank of Canada’s Macklem could deliver hawkish projections for interest rates as higher employment bills for firms will heat up inflation further. USD/CAD technical outlook After a breakdown of stretched consolidation formed in a range of 1.3482-1.3702 on a four-hour, USD/CAD has dropped dramatically to near 1.3350. The range expansion on the south side is expected to continue further as the overall market sentiment is still positive. Declining 20-and 50-period Exponential Moving Averages (EMAs) at 1.3450 and 1.3510 respectively, add to the downside filters. Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of the 20.00-40.00 range, which indicates that a bearish momentum has been activated. On the oil front, the oil price has extended its downside to near $74.50 despite analysts at Morgan Stanley having raised their forecast for China’s GDP to above 5.0%. A note from Morgan Stanley states that the removal of barriers to the housing/property sectors and recovery from COVID zero will strengthen China's economic recovery, which will solidify prospects starting from the second quarter of CY2023. It is worth noting that Canada is a leading exporter of oil to the United States and lower oil prices impact the Canadian Dollar.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

A Modest Pullback In Crude Oil Prices Undermines The Commodity-Linked Loonie (CAD)

TeleTrade Comments TeleTrade Comments 12.01.2023 09:55
USD/CAD attracts fresh buying on Thursday, though the upside potential seems limited. A modest downtick in oil prices undermines the Loonie and lends support to the major. Smaller Fed rate hike bets weigh on the USD and could cap gains ahead of the US CPI. The USD/CAD pair regains positive traction on Thursday and steadily climbs to the top end of its weekly range, closer to mid-1.3400s during the early European session. The intraday move up, however, lacks bullish conviction and is more likely to remain capped ahead of the release of the latest US consumer inflation figures. In the meantime, a modest pullback in crude oil prices from over a one-week high touched on Wednesday undermines the commodity-linked Loonie and lends some support to the USD/CAD pair. Despite the recent optimism led by China's pivot away from its zero-COVID policy, worries that a deeper global economic downturn will hurt demand act as a headwind for the black liquid. That said, subdued US Dollar price action might hold back traders from placing aggressive bullish bets around the major and keep a lid on any further gains. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, languishes near a seven-month low amid the prospects for smaller rate hikes by the Fed. Investors now seem convinced that the US central bank will soften its hawkish stance amid signs of easing inflation. This is evident from a further decline in the US Treasury bond yields and continues to weigh on the greenback. Traders, however, might prefer to wait for the crucial US CPI report before determining the near-term trajectory. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM The Fed policymakers have indicated that they remain committed to combat high inflation and that rates could remain elevated for longer, or until there is clear evidence that consumer prices are falling. Hence, a stronger US CPI print will lift bets for a more hawkish Fed and push the USD higher, allowing the USD/CAD pair to build on this week's recovery from its lowest level since November 25. Conversely, a softer reading will set the stage for an extension of the recent rejection slide from the 1.3700 round-figure mark.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Higher Oil Prices Will Strengthen The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 13.01.2023 09:25
USD/CAD has picked strength amid caution in the market mood, however the overall sentiment is still positive. Federal Reserve is likely to trim the pace of policy tightening due to a downward trend in US inflation. A sheer recovery in oil prices led by expectations of economic recovery in China may strengthen the Canadian Dollar. USD/CAD is likely to continue its downside journey toward the horizontal support plotted at 1.3226. USD/CAD has picked strength and has extended its recovery to near the round-level resistance of 1.3400 in the early European session. Earlier, the Loonie asset picked up demand after dropping to near 1.3345 as the risk appetite of the market participants dropped. Investors trimmed their longs in risk-sensitive assets after a stretched rally. The S&P500 futures have sensed selling pressure after remaining extremely bullish consecutively in the past three trading sessions, portraying caution in the overall positive market mood. A decline in the risk appetite has also impacted the demand for US government bonds, which has increased the 10-year US Treasury yields to 3.47%. The US Dollar Index (DXY) has turned sideways below 102.00 after registering a fresh seven-month low at 101.65. Soften US Inflation supports lower interest rate hike by the Fed Thursday’s release of the United States Consumer Price Index (CPI) has provided confidence that the price pressures are softening and the Federal Reserve (Fed)’s blueprint of achieving price stability is operating effectively. From a peak of 9.1%, the annual headline price index has dropped to 6.5% in a few months. Thanks to the declining gasoline and used car prices have decelerated the pace of inflation in the United States economy. A meaningful decline in the US price index has triggered odds of further deceleration in the pace of the interest rate hike already after slowing in December’s monetary policy meeting as Federal Reserve chair Jerome Powell and his teammates are working in the right direction. Philadelphia Fed Bank President Patrick Harker said on Thursday that it was time for future Fed rate hikes to shift to 25 basis points (bps) increments, as reported by Reuters. S&P500 to achieve recovery if Fed trims policy tightening pace The equity domain in the United States economy witnessed an intense sell-off in CY2022 as the Federal Reserve was on a trip of hiking interest rates to achieve the 2% inflation target. The US central bank hiked the borrowing rates with four 75 basis points (bps), two 50 bps, and one 25 bps rate hike announcements to 4.25-4.50%. As inflation is getting under control gradually and the Federal Reserve won’t be so hard on interest rates, it looks like the S&P500 will get back into the picture. The slowdown in the pace of the interest rate hike will allow firms to achieve a sense of optimism, which will support them in executing expansion plans and boosting operations. No doubt, the pace of policy tightening will be trimmed but short-term pain will stay. Philadelphia Fed Bank President Patrick Harker cited that recession in the United States economy is not into the picture but the Gross Domestic Product (GDP) could slow to 1% this year. Oil faces barricades for around $79.00 After a perpendicular rally led by support from recovery in the Chinese economy led by sheer reopening measures and expectations of further sanctioning on Russia, oil prices are facing a halt around $79.00. Moscow is expected to face further sanctions from Western countries for oil supply as nations want to restrict it from getting liquidity to fund arms and ammunition in its fight against Ukraine. Further upside in the oil price looks likely amid a decline in US inflation, which will trim the policy tightening pace of the Fed. Meanwhile, the United States administration has denied oil supply to China from its Strategic Petroleum Reserve (SPR). This will force the Chinese economy to look for alternative suppliers, which could accelerate oil prices in a short span of time. It is worth noting that Canada is a leading exporter of oil to the United States and higher oil prices will strengthen the Canadian Dollar. Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM USD/CAD technical outlook USD/CAD has delivered a breakdown of inventory distribution placed in a range of 1.3500-1.3700 on a four-hour scale. A breakdown of the inventory distribution phase results in extreme volatility expansion which triggers wider ticks to the downside. The Lonnie asset is likely to find a cushion around the horizontal support plotted from November 15 low at 1.3226. Meanwhile, downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 1.3414 and 1.3460 respectively, add to the downside filters. A bearish momentum will be triggered if the Relative Strength Index (RSI) (14) will slip into the bearish range of 20.00-40.00.
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

A Modest Pullback In Crude Oil Prices Could Undermine The Commodity-Linked Loonie (CAD)

TeleTrade Comments TeleTrade Comments 16.01.2023 09:16
USD/CAD comes under renewed selling pressure on Monday amid sustained USD weakness. Rising bets for smaller Fed rate hikes and a positive risk tone continue to weigh on the buck. A modest pullback in oil prices could undermine the Loonie and help limit any further losses. The USD/CAD pair struggles to capitalize on Friday's bounce from the 1.3320 area, or its lowest level since November 25 and meets with a fresh supply on the first day of a new week. The pair remains on the defensive through the Asian session and is currently placed near the daily low, around mid-1.3300s. The US Dollar extends its recent sell-off and drops to a fresh seven-month low amid speculations that the Fed may be nearing the end of its rate-hike cycle. This, in turn, is seen as a key factor exerting downward pressure on the USD/CAD pair. Investors now seem convinced that the US central bank will soften its hawkish stance and have started pricing in a smaller rate hike going forward. The bets were lifted by last week's US consumer inflation figures, which showed that the headline CPI fell for the first time in more than 2-1/2 years in December. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM Adding to this, several Fed officials backed the case for a 25 bps lift-off in February. This, along with a generally positive tone around the equity markets, continues to weigh on the safe-haven buck. That said, growing worries about a deeper global economic downturn should keep a lid on the optimism and lend some support to the greenback. Apart from this, a modest pullback in crude oil prices could undermine the commodity-linked Loonie and further contribute to limiting the downside for the USD/CAD pair, at least for the time being. The mixed fundamental backdrop warrants caution for aggressive bearish traders and positioning for any further losses. The US markets will remain closed on Monday in observance of Martin Luther King Jr. Day. Moreover, there isn't any major market-moving economic data due for release from Canada. Hence, traders will look to the Bank of Canada's Business Outlook Survey report for some impetus around the USD/CAD pair. Apart from this, oil price dynamics should influence the Canadian Dollar and allow traders to grab short-term opportunities around the major.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

A Modest Uptick In Crude Oil Prices Acts As A Headwind For The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 17.01.2023 08:36
USD/CAD oscillates in a narrow band and is influenced by a combination of diverging forces. A modest uptick in crude oil prices underpins the Loonie and acts as a headwind for the pair. A softer risk tone benefits the safe-haven greenback and helps limit any meaningful downside. Traders now look to Canadian consumer inflation and the US macro data for a fresh impetus. The USD/CAD pair is struggling to gain any meaningful traction on Tuesday and oscillating in a narrow trading band through the Asian session. The pair is currently hovering around the 1.3400 mark, nearly unchanged for the day, and is influenced by a combination of diverging forces. A modest uptick in crude oil prices underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair. The negative factor, to a larger extent, is offset by some follow-through US Dollar buying, which, in turn, lends some support to the major and helps limit the downside, at least for the time being. Data released earlier this Tuesday showed that China's economy grew at a better-than-expected pace in the fourth quarter. Furthermore, improving trends in Chinese Retail Sales and Industrial Production fueled optimism over an economic recovery in the world's largest crude importer and acts as a tailwind for oil prices. That said, worries about a potential global recession keep a lid on any meaningful upside for the black liquid. Traders also seem reluctant and prefer to wait on the sidelines ahead of the monthly OPEC report, due later this Tuesday, which will be looked upon for any change in the demand forecast for the current year. The US Dollar, on the other hand, attracts some haven flows amid the prevalent cautious market mood, though lacks bullish conviction amid hopes for a less aggressive policy tightening by the Fed. The mixed fundamental backdrop warrants some caution before positioning for a firm intraday direction for the USD/CAD pair. Moving ahead, the focus shifts to Canadian consumer inflation figures, due for release later during the early North American session. This, along with oil price dynamics, might influence the Canadian Dollar. Apart from this, the Empire State Manufacturing Index from the US  should provide some impetus to the USD/CAD pair
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Forex: The Bank Of Canada (BoC) Looks Set To Face A Hike Or No-Hike Dilemma

ING Economics ING Economics 17.01.2023 10:00
Chinese activity data for 4Q22 released overnight was much better than expected and supports the proposition that the 2023 Chinese growth story will support pro-cyclical currencies, including the euro. Ongoing declines in natural gas prices are also helping. Today's focus will be on digesting UK labour market data, the German ZEW, and Canadian CPI Activity data released overnight supports the view that China's zero-Covid reversal will spark resurgent Chinese demand USD: Quiet start to the week still favours pro-cyclical currencies FX markets have had a quiet start to the week – perhaps awaiting edicts from Mount Davos? However, Chinese data released overnight was material and very much supports this year's hottest trend that China's zero-Covid reversal will spark resurgent Chinese demand. My colleague Iris Pang was very impressed by the December retail sales and fourth-quarter GDP data, so much so that she has revised up the 2023 China GDP forecast to 5%. The December data, in particular, supports the proposition that despite the pick-up in case numbers, the freedom of movement story is positively dominating the Chinese demand story. The Chinese data did not, however, trigger any follow-through buying of the renminbi or Asian currencies in general. Rather than concluding that this story has already run its course in FX markets, we would prefer to see price action as merely quiet before the Chinese New Year starting next week, and the big event risk in early Asia tomorrow, which is the Bank of Japan (BoJ) meeting. The dollar itself is steady. The US data calendar only really kicks off with what may be a soft December US retail sales release tomorrow. And there are no Fed speakers during European hours today. Some further DXY consolidation looks likely in a 102.00-102.50 range today. A downside break could emerge in Asia tomorrow, were the BoJ to again tweak its 10-year JGB yield target. Chris Turner  EUR: Revising the EUR/USD forecast higher Yesterday we published some substantial upside revisions to our EUR/USD forecast profile. Broadening signs of slowing US price pressures, stronger signs of US recession, a better Chinese demand outlook and a better energy situation all made our sub-consensus EUR/USD forecasts untenable. We now favour EUR/USD moving higher through 2Q23 towards the 1.15 area – but the gains may stall there in 2H23 given what could be trouble with the US debt ceiling in late summer and higher energy prices next winter. Back to the shorter term, the EUR/USD backdrop remains supportive. As discussed above, China's demand trends are supportive of pro-cyclical currencies like the euro. That better outlook for the eurozone could appear in today's German January ZEW investor survey, where the expectations component is expected to have improved from -23 to -15.  Also positive is the continuing fall in European gas prices. Two stories caught our eye today. The first is that European natural gas inventories are now 82% full versus the average levels of 63% normally seen at this stage of the heating cycle. The second is that Chinese importers are redirecting LNG shipments to Europe, given local inventories seem sufficient. That is a surprise. The continuing fall in European natural gas remains a positive development for the eurozone trade balance and is euro supportive. EUR/USD may consolidate in a 1.0780-1.0870 range today – but the near-term macro trends remain supportive. Chris Turner GBP: 50bp hike still in play for February Our UK economist, James Smith, describes today's release of November jobs figures as "another month of relative resilience in the UK jobs market". Wage growth was a little higher than expected and supports the latest findings from the Bank Of England's Decision Maker Panel survey. Depending on the resilience of tomorrow's release of December UK CPI data it seems too early to dismiss the risk of another 50bp rate hike from the Bank of England on 2 February. Currently the market prices in around 42bp of tightening at that meeting. Today's data saw EUR/GBP drop 15 pips – a move that makes sense. EUR/GBP is trading close to 0.89 because of December's hawkish ECB shift. The longer the BoE stays in hawkish mode, the more support sterling can get. Expect EUR/GBP to trade on the soft side of an 0.8850-0.8900 range today, with tomorrow's UK CPI release proving the next major input. Chris Turner CAD: Inflation key for BoC January move The Bank of Canada (BoC) looks set to face a hike/no-hike dilemma at next week’s (25 January) policy meeting. Signs of slowing economic activity were taken on board in the latest BoC statement and clearly emerged in yesterday’s BoC Business Outlook survey, where the future sales index dropped to the lowest since the pandemic and most interviewed firms said they expect a recession in Canada. However, the jobs figures came in very strong in the December read, with robust full-time hiring keeping the unemployment rate around cyclical lows. The slowdown in wage growth from 5.4% to 5.2% did not seem enough of a silver lining, and markets have been reluctant to price out the 19bp currently embedded in the OIS curve. Today’s CPI read will be key. Consensus expectations are centred around a deceleration in headline inflation from 6.8% to 6.4%, and from 5.0% to 4.9% in the core (median) rate. Any signs of resilience in inflation would likely see markets fully price in a 25bp hike in January. Below-consensus reads should support CAD short-dated bonds, but it seems hard that investors will completely rule out a hike next week. The impact on CAD should be quite visible in both directions, although external forces should remain the key drivers on the loonie. Building USD weakness may favour a USD/CAD contraction to 1.31-1.33 in the coming weeks, although a surprise hold by the BoC is a clear upside risk for the pair.  Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Speculation That The Bank Of Canada Could Wind Up Its Tightening At The First Meeting Of 2023

Kenny Fisher Kenny Fisher 20.01.2023 12:23
The Canadian dollar is unchanged on Friday, trading at 1.3466 in the European session. We could see some volatility in the North American session, as Canada releases retail sales. Retail sales expected to decline The markets are bracing for a downturn in retail sales for November, with a forecast of -0.5% m/m for the headline figure and -0.4% for the core rate. This follows a strong report in October, as the headline reading was 1.4% and core retail sales at 1.7%. If the releases are as expected or lower, it could be a rough day for the Canadian dollar. Today’s retail sales release is the final major event prior to the Bank of Canada’s meeting on January 25th. The markets have priced in a 25-bp increase, but a hold is also a possibility, especially with December inflation falling to 6.3%, down from 6.8%. The BoC has raised rates by some 400 basis points in the current rate-tightening cycle, which began in March 2022. Similar to the market outlook on the Fed’s rate policy, there is significant speculation that the BoC could wind up its tightening at the first meeting of 2023 and then keep rates on hold. The BoC has said that future hikes will be determined by economic data, and there are signs of strength in the economy despite the Bank’s aggressive rate policy. GDP expanded by 2.9% in Q3 which was stronger than expected and job growth sparkled in December, with over 100,000 new jobs. The markets will be looking for clues about future rate policy from the rate statement and BoC Governor Macklem post-meeting comments. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM USD/CAD Technical 1.3455 is a weak support line, followed by 1.3328 1.3582 and 1.3707 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Is Expected Limited Downside Movement

TeleTrade Comments TeleTrade Comments 23.01.2023 08:46
USD/CAD picks up bids to reverse intraday losses, probes two-day downtrend. Multiple moving averages stand tall to challenge recovery moves. MACD, RSI conditions suggest further weakness but 10-week-old support line restricts immediate downside. USD/CAD licks its wounds during a sluggish Monday morning as the pre-Fed blackout joins the Lunar New Year holidays in China. Even so, the bears remain hopeful as the quote extends the previous day’s pullback from the key moving averages. That said, the Loonie pair reverses the week-start losses near 1.3375 by the press time. Not only a slew of moving averages but the bearish MACD signals and the mostly steady RSI (14) also keep the USD/CAD sellers hopeful of visiting an upward-sloping support line from November 15, 2022, around 1.3335 at the latest. It should be noted that the quote’s weakness past 1.3335 could make it vulnerable to dropping toward the September swing high near 1.3205. However, the 200-DMA support of around 1.3195 could challenge the USD/CAD bears afterward. In a case where the USD/CAD bears keep the reins past 1.3195, the 1.3000 psychological magnet will be in focus. Alternatively, the 21-DMA guards the pair’s immediate upside around 1.3480 ahead of the convergence of the 50-DMA and the 100-DMA, close to 1.3510-20. If at all the USD/CAD buyers manage to cross the 1.3520 hurdle, a downward-sloping resistance line from October 13, 2022, near 1.3615, could act as the last defense of the pair sellers. Overall, USD/CAD remains on the bear’s radar even if the 2.5-month-old support line limits nearby declines. USD/CAD: Daily chart Trend: Limited downside expected
Further Upward Price Movement Of The AUD/USD Pair Is Expected

China’s Reopening Could Boost Australia’s Economy

TeleTrade Comments TeleTrade Comments 24.01.2023 09:03
AUD/USD is struggling to extend gains above the immediate resistance of 0.7040. Reserve Bank of Australia might continue its restrictive monetary policy despite a contraction in economic activities. Federal Reserve is highly likely to decelerate the pace of policy tightening to 25 bps amid softening inflation. AUD/USD is expected to continue its upside momentum broadly as momentum oscillators are supporting the Australian Dollar. AUD/USD has sensed selling interest while attempting to surpass the immediate resistance of 0.7040 in the Asian session. The Aussie asset is witnessing heat after the release of the downbeat preliminary Australian S&P PMI (Jan) data in early Tokyo. Also, a recovery in the US Dollar Index (DXY) has triggered volatility in the Aussie asset. The US Dollar Index has recovered after dropping to near 101.50. The USD Index has refreshed its day’s high at 101.61 as investors are supporting the safe-haven assets again amid a decline in the demand for US government bonds. The 10-year US Treasury yields have recaptured the critical resistance of 3.52%. Meanwhile, the S&P500 futures are aiming to recover their morning losses. The 500-US stock basket futures witnessed significant buying interest on Monday amid rising chances of further deceleration in the pace of policy tightening by the Federal Reserve (Fed). Australian Manufacturing PMI trims straight for seven month According to the preliminary S&P PMI (Jan), Australian Manufacturing PMI has trimmed consecutively for the seven-month to 49.8 while the street was expecting an expansion to 50.3. Also, the Services PMI has dropped vigorously to 48.3 from the consensus of 49.7. Rising interest rates by the Reserve Bank of Australia (RBA) in its fight against stubborn inflation are leading to a contraction in economic activities. The absence of easy money for firms to execute investment and expansion plans along with bleak economic demand has trimmed the scale of economic activities. Australian economic activities could recover ahead as China is on the path of recovery now after dismantling Covid-inspired lockdown curbs. According to a note from JPMorgan, Australia’s economy could be no small beneficiary of an end to China’s zero-Covid policy over the next two years. Also, China’s reopening could boost Australia’s economy by 1%. Investors await Australian Inflation for further guidance This week, investors will keenly focus on the release of the Australian Consumer Price Index (CPI) data for the fourth quarter of CY2022, which is scheduled for Wednesday. According to the estimates, the annual CPI is expected to escalate further to 7.5% from the prior release of 7.3%. While monthly inflation is seen sharply higher at 7.7% from the former release of 7.3%. A release of the unchanged or higher-than-anticipated Australian inflation data might force the Reserve Bank of Australian Governor Philip Lowe to hike its Official Cash Rate (OCR) further. It is worth noting that the Reserve Bank of Australia is continuously hiking the interest rates to trim inflation, however, the energy prices are continuously ruining the whole plan. Australian Treasurer Jim Chalmers cited that the worst part of the country's inflation crisis was over. He believes "The Australian economy will begin to soften a bit this year and that is the inevitable likely consequence of higher interest rates and a slowing global economy.” Federal Reserve to trim the pace of restrictive policy further Multiple catalysts belonging to the United States are conveying that inflation is softening further. Firms have been forced to release fewer employment opportunities due to the lower Producer Price Index (PPI) amid bleak economic projections. Also, US Treasury Secretary Janet Yellen cited on Monday that overall, she has a “good feeling that inflation is coming down.” This has further accelerated the odds of 25 basis points (bps) interest rate hike by the Federal Reserve (Fed) in its February monetary policy meeting. According to the CME FedWatch tool, the odds of a 50 bps interest rate hike have vanished significantly. More than 98% chances are favoring a 25 bps interest rate hike by Federal Reserve chair Jerome Powell. It is worth noting that the Federal Reserve has already trimmed the scale of hiking interest rates after four consecutive 75 bps interest rate hikes to 50 bps in its December monetary policy meeting. AUD/USD technical outlook AUD/USD is marching towards the five-month high plotted from January 18 high at 0.7064 on an hourly scale. The Aussie asset displayed a V-shape recovery from January 19 low around 0.6875, which provides confidence that bullish momentum is present in the current trend. The 20-period Exponential Moving Average (EMA) around 0.7020 is constantly providing cushion to the Australian Dollar. Also, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is solid
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

The Loonie Pair (USD/CAD) Cheers The Broad US Dollar Weakness

TeleTrade Comments TeleTrade Comments 24.01.2023 09:07
USD/CAD fades bounce off intraday low during four-day downtrend. Oil price struggles to defend gains amid mixed concerns. Hawkish hopes of Bank of Canada, talks surrounding Fed policy pivot keep sellers hopeful. Preliminary readings of US S&P Global PMIs for January will be crucial ahead of BoC interest rate decision. USD/CAD slides to 1.3350 as bears keep the reins for the fourth consecutive day heading into Tuesday’s European session. In doing so, the Loonie pair cheers the broad US Dollar weakness, as well as a slow grind to the north in prices of Canada’s key export item, namely WTI crude oil, ahead of monthly activity data from the US. It’s worth noting that Wednesday’s Bank of Canada (BoC) monetary policy decision will be eyed closely by the pair traders amid talks surrounding a policy pivot. That said, WTI crude oil pares intraday gains near $81.70 after a softer start to the week. Even so, black gold remains around the seven-week high amid hopes of China-linked demand. It should be observed that the latest talks surrounding the US readiness to use Special Petroleum Reserves (SPR) in the need weigh on the quote. Elsewhere, the struggles between the US and China surrounding the Beijing-based companies’ ties to the Russian war effort join the fears of economic recession to weigh on the market sentiment and probe USD/CAD bears. Though, mixed figures of the Canadian housing data published the previous day joined the downbeat US Conference Board’s Leading Index and put a floor under the prices. On a broader front, the absence of Fed policymakers’ talks ahead of the February meeting and the Lunar New Year holidays in China restricts the market moves, as well as limit USD/CAD pair’s momentum. Amid these plays, the S&P 500 Futures resist following Wall Street’s gains while retreating from the six-week high marked the previous day, making rounds to 4,030-35 at the latest. On the same line, the US 10-year and two-year Treasury bond yields snap three-day recovery moves by struggling around 3.51% and 4.21% by the press time. To break the monotony, USD/CAD traders may take clues from the first readings of January’s S&P Global PMIs and the fourth-quarter (Q4) Gross Domestic Product (GDP). However, major attention will be given to Wednesday’s BoC where the Canadian central bank is up for 0.25% rate hike. More importantly, hints for further rate hikes will be closely observed to determine further downside bias for the Loonie pair. Technical analysis Having failed to cross the 100-DMA, around 1.3515 by the press time, the USD/CAD bears poke a 10-week-old support line, near 1.3340 at the latest, to confirm further downside of the Loonie pair.
The Hungarian Central Bank Confirmed Its Commitment To Keeping Conditions Tight For A Longer Period

The Hungarian Central Bank Confirmed Its Commitment To Keeping Conditions Tight For A Longer Period

ING Economics ING Economics 25.01.2023 09:44
The Bank of Canada is facing a hike/no-hike dilemma today. Our view is that it will deliver the last 25bp hike of the cycle now, but retain some flexibility to avoid sounding too dovish. The CAD impact may be slightly positive. Elsewhere, there are no key data releases in the US, while the German Ifo index will be watched closely after yesterday's strong PMIs USD: No key US data today Yesterday’s PMIs painted a less dramatic picture of the US service sector compared to the latest ISM survey and triggered a positive reaction in the dollar. However, markets quickly sold the USD rally, confirming a rather pronounced bearish bias despite encouraging data. It does appear investors are happily buying the dip in EUR/USD around the 1.0850 handle at the moment, and that could prove to be a short-term floor for the pair. There are no data releases to highlight today and no Fed speakers due to the pre-FOMC blackout period. Markets have cemented their view that next week’s move will be a 25bp hike, but are still reluctant to fully price in another 25bp of tightening: the futures and swap market are embedding a 4.90% peak rate. This signals the perceived balance of risks is tilted to the dovish side ahead of next week’s FOMC. Should this narrative gain more traction this week, the dollar may remain gently offered. However, a sharper decline in the dollar may not be on the cards until other large event risks (European Central Bank, Bank of England meetings) are past us. Francesco Pesole EUR: 1.0850 emerging as a short-term floor A below-consensus reading in German manufacturing was the only flaw in an otherwise convincing set of PMIs in the eurozone yesterday. The eurozone composite PMI index moved back into expansionary territory (i.e. above 50.00) for the first time since June 2022, endorsing the ongoing re-rating of the growth outlook in the region. As mentioned in the USD section, 1.0850 has emerged as a buy-the-dip area in EUR/USD over the past two sessions. Good data out of the eurozone is likely keeping most investors on the bullish side of the euro for now, and downside risks for EUR/USD appear contained. A test of 1.1000 by the end of the week is looking more likely, although a decisive break higher is not our base case before the ECB. Today, the focus will be on the Ifo indices out of Germany. All three gauges (business climate, current assessment, and expectations) are expected to improve. Looking at the ECB pricing ahead of next week's meeting, it now seems very plausible that markets will not question a 50bp hike, although another half-point move in March is not fully priced in (around 80% implied probability). The degree of ECB President Christine Lagarde’s commitment to another 50bp move will be the key driver of the market reaction next week. Francesco Pesole CAD: BoC to hike one last time Once a hawkish stand-out, the Bank of Canada is facing a hike/no-hike dilemma today. This is, at least, what market pricing seems to suggest, with 17bp of tightening priced in for today’s announcement. Economists’ consensus is leaning more in favour of a 25bp move, which is also ING’s view. As discussed in our BoC preview, a still-tight jobs market is partly offsetting the decline in headline inflation and signs of economic slowdown, and probably suggests this is the right time to deliver the last 25bp hike of the cycle. Should the BoC surprise with a hold, there’s a good chance the bank will keep the door open for a move in March, which would match the market’s current pricing, and ultimately fail to hit the Canadian dollar. A 25bp hike but a strong signal that rates have peaked and growing concerns on the economic outlook (new economic projections are released today) could prove to be a more dovish outcome than a “hawkish hold”, as markets price in more rate cuts in the second half of the year. This is, however, hardly a desirable outcome for a central bank that is still fighting inflation, and our impression is that the BoC will want to retain some ambiguity around future moves for now. The impact on CAD may be positive but rather limited in the end. USD/CAD remains on track for a move to 1.30 in the coming months, in our view, but USD weakness should be the primary driver of such a move. Francesco Pesole HUF: Forint strongest since the middle of last year The Hungarian central bank yesterday confirmed its commitment to keeping conditions tight for a longer period and that it has taken a patient approach to monetary policy. Moreover, the NBH reiterated its intention to continue withdrawing liquidity from the market via the one-week discount bill and the long-term deposit tender. More interestingly, the NBH raised the reserve requirement ratio for banks to 10% effective from April. Overall, it has sent a very clear signal that the hawkish mode will last for an extended period of time and the central bank is not going to allow any hasty moves. The result is a forint slightly below 390 EUR/HUF at the end of yesterday's trading, higher rates at the short end of the IRS curve and FX implied yields climbing higher. The forint is thus the strongest since the middle of last year and we believe it could still benefit from yesterday's decision. Added to this is the higher EUR/USD level compared to last week and yesterday's renewed drop in gas prices back below €60/MWh. On the other hand, we may see some profit-taking today after the forint's multi-day rally and ahead of Friday's risky sovereign rating review from S&P. Overall, we expect the forint to stabilise around 390 EUR/HUF for now. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

A Hawkish Interest Rate Decision By The Bank Of Canada Might Strengthen The Canadian Dollar

TeleTrade Comments TeleTrade Comments 25.01.2023 10:24
USD/CAD is set to extend the downside to near the weekly low around 1.3320. Bank of Canada is expected to hike the interest rate further by 25 bps to 4.5%. The expectation of a smaller interest rate hike by the Federal Reserve is backed by escalating recession fears. USD/CAD is expected to deliver a breakdown of the Inverted Flag chart pattern that might expand volatility ahead. USD/CAD is hovering near the critical support above 1.3340 in the early European session. The Loonie asset has dropped after failing to sustain above 1.3400 and is expected to decline further to near the weekly lows around 1.3320. The major is following the footprints of the US Dollar Index (DXY), which is displaying a subdued performance. Weakness in the S&P500 futures led by a dip in Microsoft earnings due to missed estimates in the cloud business and technical glitches in the NYSE has turned investors’ risk-averse. Also, investors are restricting themselves from building full-capacity positions ahead of the United States Gross Domestic Product (GDP) data. The US Dollar Index (DXY) is struggling to sustain above the 101.50 resistance. The alpha created by the US government bonds has rebounded firmly. The 10-year US Treasury yields have scaled to near 3.47%. Bank of Canada to tighten policy further To tame stubborn inflation, the Bank of Canada (BoC) might continue to tighten its monetary policy further. Canada’s inflation has been recorded at 6.3% from its December Consumer Price Index (CPI) report, which is three times more than the 2% inflation target. According to a poll from Reuters, Bank of Canada Governor Tiff Macklem’s aggressive policy tightening campaign is expected to calm down as the street sees a further interest rate hike by 25 basis points (bps) to 4.50%. Also, it conveys that the Bank of Canada will keep interest rates at 4.5% for the rest of the year, which indicates that this might be the end of further policy tightening. Canada’s headline inflation stood at 6.3% for December and is expected to remain above 2% inflation target till Q3CY2024. Factors that have kept Canada’s inflation at the rooftop are the tight labor market and supply chain bottlenecks. Upbeat employment opportunities have not provided a significant reason to producers to trim the prices of goods and services at factory gates. A higher-than-projected hawkish interest rate decision by the Bank of Canada might strengthen the Canadian Dollar. Oil price attempts a recovery from $80.00 Sheer weakness in the oil prices witnessed on Tuesday has met with demand in Wednesday morning around the critical support of $80.00. The black gold witnessed immense pressure as oil demand is expected to witness short-term pain due to extended holidays in Chinese markets for Lunar New Year celebrations. Also, the absence of chatters about supply cuts in the report from OPEC impacted the oil price. Meanwhile, the oil price has attempted a recovery amid headlines that the United States is considering refilling the Strategic Petroleum Reserve (SPR). US President Joe Biden exploited the oil reserves to fight rising oil prices in CY2022. It is worth noting that Canada is a leading exporter of oil to the United States and a recovery in the oil price might support the Canadian Dollar. Read next: The Aussie Pair Is Above 0.70$, GBP/USD Pair Lost Its Level Of 1.24$| FXMAG.COM Contraction in US GDP might accelerate recession fears After a better-than-projected preliminary United States S&P PMI data, investors are shifting their focus toward the release of Thursday’s Gross Domestic Product (GDP). The street is expecting the fourth quarter GDP at 2.8% vs. the prior release of 3.2%. Investors should be aware of the fact that the US Bureau of Economic Analysis reported negative growth in the first two quarters of CY2022. And further contraction in the fourth quarter might accelerate recession fears. The rationale behind softening of economic activities is the higher interest rates by the Federal Reserve (Fed), which has trimmed the leakage of borrowings due to higher interest obligations. Apart from that, chatters about interest rate policy by the Federal Reserve are impacting the US Dollar. The street is expecting a further deceleration in the pace of policy tightening by the Federal Reserve as inflation has been softened significantly. USD/CAD technical outlook USD/CAD is forming an Inverted Flag chart pattern on an hourly scale that indicates a sheer consolidation, which is followed by a breakdown in the same. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias. Downward-sloping 20-and 50-period Exponential Moving Average (EMA) at 1.3365 and 1.3375 respectively are acting as a major barricade for the US Dollar. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates volatility contraction
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Loonie Pair (USD/CAD) Is Looking To Shift Its Business

TeleTrade Comments TeleTrade Comments 26.01.2023 08:43
USD/CAD is aiming to shift its auction above 1.3400 as the BoC has reached the terminal rate for now. The rising probability of a smaller interest rate hike by the Fed is weighing on US yields. Oil price is losing foot above $80.50 as oil demand sees short-term pain due to China’s Lunar New Year holidays. The USD/CAD pair has corrected marginally after a recovery move from 1.3380 in the Asian session. The Loonie asset is looking to shift its business above 1.3400 despite a recovery attempt from the US Dollar Index (DXY). The recovery attempt in the USD Index seems less confident amid the risk-on market mood. S&P500 futures are showing marginal gains in early Asia after settling almost flat on Wednesday. The 500-stock basket has turned volatile as corporate are demonstrating their quarterly performance through earnings displays. The USD Index is putting efforts in building a cushion around a seven-month low at 101.10 ahead of the United States Gross Domestic Product (GDP) (Q4) and other economic data, which will release on Thursday. The rising probability of a smaller interest rate hike by the Federal Reserve (Fed) for its February meeting is weighing on the US Treasury yields. The alpha generated by the 10-year US Treasury bonds has dropped to 3.44%. The street is expecting a contraction in the scale of economic activities in the fourth quarter to 2.6% from the former release of 3.2% as Fed chair Jerome Powell has burnt their hands by triggering recession fears in his fight against stubborn inflation. The release of the Durable Goods Orders (Dec) will provide cues about the forward demand, which is expected to jump to 2.5% vs. the prior release of -2.1%. Meanwhile, the Canadian Dollar is expected to face the heat as Bank of Canada (BoC) Governor Tiff Macklem has paused further policy tightening after pushing the interest rates by 25 basis points (bps) to 4.5%. The BoC will keep interest rates steady at 4.5% for the rest of the year and will assess the impact of yet terminal rate ahead. On the oil front, oil price is struggling to sustain above 80.50 as celebrations in China due to the Lunar New Year festival has resulted in a pause in economic activities and henceforth a short-term pain in the oil demand. It is worth noting that Canada is a leading exporter of oil to the United States and lower oil prices might impact the Canadian Dollar.  
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

TeleTrade Comments TeleTrade Comments 27.01.2023 09:36
USD/CAD portrays corrective bounce from seven-month-old ascending support line. Downbeat oscillators, 38.2% Fibonacci retracement and previous support line guards recovery moves. 100-DMA holds the key to buyer’s conviction while break of 1.3300 could aim for 200-DMA. USD/CAD picks up bids to pare recent losses around the lowest levels in 11 weeks, mildly bid near 1.3340 heading into Friday’s European session. In doing so, the Loonie pair bounces off an upward-sloping support line from early June 2022. However, a convergence of the previous support line from mid-November and the 38.2% Fibonacci retracement level of the pair’s April-October upside, near 1.3380 by the press time, restricts USD/CAD pair’s recovery. Other than the aforementioned key resistance confluence near 1.3380, the bearish MACD signals and the downward-sloping RSI (14) also challenge the Loonie pair’s corrective bounce. Even if the USD/CAD buyers manage to cross the 1.3380 hurdle, the 100-DMA surrounding 1.3525 will be crucial to stop the upside momentum, a break of which won’t hesitate to challenge the monthly high of near 1.3685. On the flip side, a daily closing below the stated multi-month-old support line, close to 1.3300 at the latest, could quickly fetch the USD/CAD pair towards the 200-DMA support of around 1.3210. In a case where the USD/CAD remains bearish past 1.3210, the 1.3200 round figure may act as the last defense of buyers before relinquishing control. USD/CAD: Daily chart Trend: Limited recovery expected
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

TeleTrade Comments TeleTrade Comments 30.01.2023 09:46
USD/CAD keeps bounce off 2.5-month low while snapping two-day downtrend. Shift in market sentiment exerts downside pressure on Oil price, favors US Dollar. China-linked headlines entertain traders amid a light calendar. Fed’s dovish hike, softer NFP appears necessary for bears to keep the reins. USD/CAD picks up bids to refresh intraday high around 1.3325 during the first positive day in three heading into Monday’s European session. In doing so, the Loonie pair takes clues from the downbeat Oil prices, Canada’s main export, as well as a rebound in the US Dollar amid the market’s cautious optimism. That said, WTI crude oil takes offers to refresh intraday low near $79.50 as early Asian session optimism, mainly led by China’s return from the one-week-long Lunar New Year (LNY) holidays, fades amid mixed concerns. Read next: A Loss Of $48 Billion In Shares Of The Indian Group Adani As A Result Of The Hindenburg Research Report| FXMAG.COM Also challenging the Oil price could be the US Dollar Index (DXY) rebound from the intraday low while ignoring the US Treasury bond yields. That said, the DXY prints a three-day uptrend near 102.00 but the US 10-year Treasury bond yields retreat from daily tops to 3.50% after the Japanese panel teases hawkish moves of the Bank of Japan (BOJ). Elsewhere, Bloomberg poured cold water on the face of expectations that the holiday season propelled China activities. The analysis stated a few signs of improvement in the Chinese economy despite its second month without Covid Zero curbs. The research, however, marks the Lunar New Year (LNY) holiday season as marking a lid on some activities. Against this backdrop, the US Treasury bond yields retreat from the intraday top but the stock futures print mild losses. Furthermore, the Asia-Pacific shares grind higher and the US Dollar Index (DXY) defends a two-day recovery. Looking forward, risk catalysts are likely to determine short-term market moves ahead of Wednesday’s Federal Open Market Committee (FOMC) and Friday’s US jobs report for January. It’s worth noting that headlines surrounding China are an extra burden on the USD/CAD watchers to determine near-term moves. Technical analysis A four-day-old bearish triangle restricts USD/CAD moves between 1.3290 and 1.3330.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Is On The Way To Late 2022 Low

TeleTrade Comments TeleTrade Comments 01.02.2023 09:47
USD/CAD licks its wounds after falling the most in a week. Oil price struggles despite softer US Dollar as markets brace for OPEC+ verdict. Softer US data, yields join bearish bias for the Fed to lure Loonie pair sellers. Canada GDP appeared unimpressive but PMIs may offer intermediate moves. USD/CAD remains defensive around 1.3310 amid sluggish markets on early Wednesday, treading water after reversing from a one-week high the previous day. The Loonie pair’s latest inaction portrays the cautious mood ahead of the Federal Open Market Committee (FOMC) monetary policy meeting. Also challenging the quote is the Oil traders' anxiety before the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known collectively as OPEC+. That said, the WTI crude oil, Canada’s main export earner, grinds higher past $79.00 following a strong reversal from the three-week on Tuesday. It should be noted that Reuters has already turned down the odds of any change in the OPEC+ JMMC’s previous verdict favoring the supply cuts from major producers. On the other hand, the US Dollar Index (DXY) remains indecisive after reversing from a one-week high as an early signal for the US inflation printed downbeat figures. That said, US Employment Cost Index (ECI) for the fourth quarter (Q4) eased to 1.0% versus 1.1% market forecasts and 1.2% prior readings. Further, the Conference Board (CB) Consumer Confidence eased to 107.10 in January versus 108.3 prior. It should be noted that no major attention could be given to the US Chicago Purchasing Managers’ Index (PMI) for January which rose to 44.3 versus 41 expected and 44.9 previous readings. At home, Canadian Gross Domestic Product (GDP) for November grew by 0.1% MoM, matching October's expansion of 0.1% but rose past the market expectation of 0%. It should be observed that the pre-event cautiousness joins China’s Consecutive sixth below 50.0 print of the Caixin Manufacturing PMI, which in turn probes the Oil price and put a floor under the USD/CAD. Additionally, mildly offered S&P 500 Futures act as an additional challenge for the Loonie pair sellers. On the contrary, downbeat yields challenge the US Dollar bulls ahead of the key event. The benchmark US 10-year Treasury bond yields remain sluggish near 3.51% and defend the previous day’s pullback. Looking forward, dovish bias over the Fed joins the likely unimpressive OPEC+ meeting to keep USD/CAD bears hopeful. Also important will be the monthly PMI data for the US and Canada. Technical analysis Unless providing a daily close beyond the one-month-old descending resistance line, close to 1.3380 by the press time, USD/CAD is on the way to late 2022 low surrounding 1.3225.
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The USD/CAD Pair Bulls Are Likely To Remain Skeptical

TeleTrade Comments TeleTrade Comments 02.02.2023 09:04
USD/CAD holds lower grounds near 2.5-month bottom, fades bounce off 200-EMA of late. Clear downside break of short-term key support line favors sellers. 50-EMA holds the key to bull’s conviction, 1.3700 appears a tough nut to crack for them. USD/CAD remains pressured around the lowest levels since mid-November 2022 as it pokes the 200-day Exponential Moving Average (EMA) during early Thursday. In doing so, the Loonie pair prints mild losses during the three-day losing streak. It’s worth noting that the quote’s sustained trading below the 50-EMA and a clear break of the eight-month-old ascending support line seems to keep the USD/CAD bears hopeful. Also favoring the sellers is the absence of an oversold RSI (14) line. That said, the Loonie pair bears are very much capable of breaking the aforementioned key 200-EMA support surrounding 1.3260. However, multiple levels marked since July 2022, surrounding 1.3230-20, portray strong support for the USD/CAD sellers to break if they wish to keep the reins. Following that, a 61.8% Fibonacci retracement of the pair’s April-October 2022 run-up near the 1.3000 psychological magnet will be a crucial level to lure the USD/CAD bears. On the contrary, a daily closing beyond the support-turned-resistance line from June 2022, close to 1.3320 by the press time, could activate the pair’s corrective bounce. Even so, the USD/CAD bulls are likely to remain skeptical unless witnessing a daily closing beyond the 50-EMA level surrounding 1.3450. In a case where the quote crosses the 1.3450 hurdle, the odds of its rally toward the multiple hurdles nearing 1.3700 can’t be ruled out. USD/CAD: Daily chart Trend: Further downside expected
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Downside Of The USD/CAD Pair Remains Limited

TeleTrade Comments TeleTrade Comments 06.02.2023 09:57
USD/CAD struggles to capitalize on a modest bullish gap opening on Monday. An uptick in crude oil prices underpins the Loonie and acts as a headwind. A combination of factors continues to benefit the USD and lends support. The USD/CAD pair fills the modest bullish gap opening on Monday and retreats to the 1.3400 mark during the early part of the European session. Crude oil prices edge higher and recover a part of Friday's slide to over a one-month low, which, in turn, is seen underpinning the commodity-linked Loonie and acting as a headwind for the USD/CAD pair. The downside, however, remains cushioned amid strong follow-through US Dollar buying interest. In fact, the USD Index, which tracks the greenback against a basket of currencies, builds on Friday's solid recovery from a nine-month low and continues to draw support from a combination of factors. The upbeat US jobs data could allow the Fed to stick to its hawkish stance and keep raising rates. The expectations push the US Treasury bond yields higher, which, along with the risk-off environment, is seen benefitting the safe-haven greenback. This, in turn, suggests that the path of least resistance for the USD/CAD pair is to the upside and any meaningful slide is likely to get bought into. There isn't any major market-moving economic data due for release from the US on Monday, leaving the USD at the mercy of the US bond yields and the broader market risk sentiment. Apart from this, traders will take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
Sharp drop in Canadian inflation suggests rates have peaked

Oil Price Is Struggling To Stretch Its Upside Move And Will Support The Canadian Dollar

TeleTrade Comments TeleTrade Comments 09.02.2023 09:12
USD/CAD is attempting to deliver a breakout of the Falling Channel for the third time. The Loonie asset has reclaimed the 20-EMA, which indicates that the short-term trend is bullish now. A break into the bullish range of 60.00-40.00 by the RSI (14) will activate upside momentum. The USD/CAD pair has dropped firmly to near 1.3435 after failing to recapture a weekly high around 1.3476 in the early European session. The Loonie asset is following the footprints of the US Dollar Index (DXY), which has surrendered the 103.00 cushion amid a sheer recovery in the risk-on impulse. S&P500 futures have extended their gains firmly as investors’ risk appetite has improved after the market digested the hawkish interest rate guidance from the Federal Reserve (Fed). Meanwhile, the oil price is struggling to stretch its upside move above $78.50. It is worth noting that Canada is a leading exporter of oil to the United States and higher oil prices will support the Canadian Dollar. USD/CAD is attempting to deliver a breakout of the Falling channel chart pattern on a two-hour scale, for the third time after two failed breaks due to the absence of strength in the US Dollar bulls. The Loonie is testing the strength of the breakout near 1.3432. The 20-period Exponential Moving Average (EMA) at 1.3423 is acting as major support for the US Dollar bulls. Meanwhile, the Relative Strength Index (RSI) (14) is struggling to cross 40.00. A break into the bullish range of 60.00-40.00 will activate upside momentum. A break above February 7 high at 1.3469 will drive the asset toward January 19 high at 1.3521 followed by January 6 low at 1.3538. On the flip side, a slippage below Wednesday’s low at 1.3360 will drag the asset toward January 3 low at 1.3321 and February 2 low at 1.3262. USD/CAD two-hour chart  
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Weak Canadian Labor Market Data May Reinforce The Market's Dovish Expectations Regarding The Bank Of Canada's Future Actions

InstaForex Analysis InstaForex Analysis 10.02.2023 08:11
The Canadian dollar trades in a wide price range, which limits are marked with the levels of 1.3360-1.3460 (marks correspond to the lines Tenkan-sen and Kijun-sen on the D1 chart). During the entire week ,the pair alternately pushes back against the limits of this 100-point price range, and by and large, it makes no headway. If we look at the pair's weekly chart, we will see that the pair is within the framework of the upward pullback. Last week, the bears made a new near 3-months low (1.3261), but failed to consolidate within the range of the 32nd figure, amid strong US Nonfarm and increasing hawkish expectations of the Federal Reserve's next actions. However, the price growth stalled: traders are waiting for the "Canadian Nonfarm" to be released at the start of the U.S. trading session on Friday. An important report for the Canadian currency Typically, key U.S. and Canadian labor market data is released on the same day and even at the same time. The U.S. Nonfarm set the tone for all of the U.S. dollar pairs, while the Canadian figures are in the shadow: for obvious reasons, few traders are interested in them. In the context of the pair, the loonie follows the greenback, so the Canadian Nonfarm remains in the background compared to the more weighty U.S. report. But this month there was, so to speak, a "de-synchronization" with an interval of a week: the main labor market report in the US was released last Friday, while in Canada it will be released today, February 10. The U.S. report provided support for the bulls, while the Canadian figures could either strengthen the bullish sentiment or trigger a downward momentum. Either way, the loonie will only react to "its" numbers today, as the market has already effectively played back the US report. Take note that preliminary forecasts do not promise a "bright future" for the Canadian dollar. Most likely, the report will be quite weak and that will put more pressure on the loonie, allowing the bulls to overcome the resistance level of 1.3520 (the middle line of the Bollinger Bands indicator on the weekly chart) and stay within the 35th figure. Thus, the Canadian employment report is expected to rise by only 15,000 in January after a strong jump of 104,000 in December. That said, January's 15,000 gain will come mostly from an increase in part-time employment (+10,000), while the full-time component will show a more modest result (+5,000). The "headline" indicator of the report is also unlikely to impress traders: the unemployment rate should rise to 5.1%. In this case the growth is minimal, but a consistent downtrend was recorded during the last two months. The labor force participation rate is likely to fall in January, from 65.0% in December to 64.7%. Possible effects of a weak report At the end of the Bank of Canada's January meeting, the central bank increased the rate by 25 basis points, but actually announced a pause. Bank of Canada Governor Tiff Macklem said that further interest rate increase may not be necessary, because, according to the central bank's forecasts, "economic growth will slow down with a simultaneous decline in inflation". A little later, the governor outlined the central bank's decision in more straightforward terms, saying it was now time to pause to assess whether monetary policy was sufficiently restrictive. In other words, Macklem confirmed rumors following its January meeting that the central bank intends to maintain a wait-and-see approach. Therefore, a weak labor market report will not play a decisive role in this matter (this issue has already been resolved). Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM   However, now there are talks on a different plan - that the Bank of Canada may cut the rate in the second half of this year. The poll of market participants for 4 quarter published by the Canadian central bank on Monday showed that the median forecasts for the rate by the end of 2023 was 4%, i.e. rate reduction by 50 basis points is supposed. And while at the final press conference in January, Macklem said that "it is too early to talk about interest rate cuts," he did not actually rule out such a scenario (as, for example, the U.S. Federal Reserve did, de facto ruling out a rate cut in 2023). Therefore, weak Canadian labor market data may reinforce the market's dovish expectations regarding the Bank of Canada's future actions. Conclusions If the Canadian Nonfarm is in the red zone, bulls may attempt an upward breakout, overcoming the upper limit of the 1.3360-1.3460 range. The closest target will be 1.3520, which is the middle line of the Bollinger Bands on the weekly chart. In case Friday's report turns out to be in the green zone, then most likely, the pair will continue to trade within the aforementioned price range.   Relevance up to 18:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334712
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The USD/CAD Pair Is Expected Further Upside Movement

TeleTrade Comments TeleTrade Comments 10.02.2023 09:02
USD/CAD grinds higher after positing two-day winning streak. Bullish MACD signals, sustained trading beyond weekly support line favor buyers. Convergence of 100-DMA, four-month-old resistance line appears a tough nut to crack for bulls. USD/CAD teases buyers around 1.3465-70 heading into Friday’s European session, after a two-day uptrend, as the Loonie pair traders await crucial statistics from Canada and the US.  In doing so, the quote remains indecisive despite printing minor gains by the press time. Also read: USD/CAD copies Oil’s inaction near mid-1.3400s, Canada employment, early signals for US inflation eyed Even so, the bullish MACD signals join the pair’s successful trading above the weekly support line, around 1.3390 by the press time, to keep the buyers hopeful. That said, the 50-DMA level surrounding 1.3500 guards the USD/CAD pair’s immediate upside before the convergence of the 100-DMA and descending resistance line from early October, close to 1.3540 at the latest. In a case where the Loonie pair manages to stay beyond 1.3540, the previous monthly high of 1.3685 and the December 2022 peak surrounding 1.3705 will act as the last defense of the USD/CAD bears. On the flip side, a clear break of the weekly support line, near 1.3390, will aim for the weekly low of 1.3360 before highlighting the monthly bottom surrounding 1.3260. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM Should the USD/CAD prices remain weak past 1.3260, November 2022 low and the last July’s peak, respectively around 1.3235 and 1.3220, will gain the market’s attention. USD/CAD: Daily chart Trend: Further upside expected
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: The waiting game is on

ING Economics ING Economics 10.02.2023 10:26
Now that markets have absorbed hawkish reactions by central bankers after the latest rate announcement and data releases, the focus will shift back to data. We think the dollar may lack clear direction until next week’s inflation data. Canadian jobs numbers have the potential of driving large CAD swings today USD: Lack of direction The dollar is struggling to find clear direction in the current market environment. Federal Reserve officials continued to push their hawkish rhetoric this week but had to implicitly and explicitly acknowledge more evidence from data must be gathered before debating the size of further tightening. This is essentially leaving the market with one conviction - a 25bp hike in March - and one outstanding doubt about whether that will mark the peak. Fed funds futures are mirroring this uncertainty by pricing in a 5.14% peak rate. We suspect key dollar crosses will stay rangebound until the next key data releases. While today’s University of Michigan survey could have some market impact, next week’s CPI is the real risk event. And if the general risk environment proves resilient for another session today, the dollar should still find a floor on the back of some defensive positioning ahead of next week’s inflation data, as happened in the run-up to the Fed meeting. Fed communication remains important, but secondary to data. After all, markets have already had the chance to assess the reaction function of the Fed to strong economic data after the latest jobs report and another round of Fedspeak. Additional policy remarks from the Fed’s Christopher Waller and Patrick Harker today are not likely to be a game changer for the dollar. DXY may keep hovering around the 103 handle into next week’s CPI report. The latest jobs figures in the US likely raised the bar for a positive surprise in Canada today, even though the consensus is centred on a rather small increase in the headline hiring figure (+15k). Unlike the Fed, the Bank of Canada has signalled its tightening cycle is probably over, even though it left the door open for more hikes should data argue against the disinflationary narrative. Markets are pricing little to no chance of further rate hikes, but equally seem reluctant to factor in any rate cuts by year-end. This leaves some room on both ends for a pronounced CAD impact from a data surprise today. A weak number could fuel easing bets (risk of cuts is higher than expected anyway, in our view), while a strong number – paired with the recent revision higher in Fed rate expectations – could encourage markets to contemplate one last hike by the BoC. We still expect USD/CAD to test 1.3000 in the coming months, but the key driver may be USD weakness rather than loonie outperformance.  Francesco Pesole EUR: Rangebound for now A brief rally failed to propel EUR/USD back above 1.0800 yesterday, and the pair may mostly trade in the 1.07-1.08 range until next week’s data offers clearer direction to the dollar. Despite an improved risk environment helping the pro-cyclical euro, below-consensus inflation in Germany yesterday may have made investors more cautious about another EUR rally. In this sense, the ability of European Central Bank speakers to lift the euro appears diminished. One of the most prominent hawkish voices in the ECB, Isabel Schnabel, will participate in a live Q&A today, although her message on the need for more tightening has already been passed through to asset prices. Pablo Hernandez de Cos is also scheduled to speak today. Elsewhere in Europe, Norwegian CPI saw a significant upside surprise. We expect a final 25bp hike at the March meeting, though the surprise surge in underlying inflation suggests the committee could add another 25bp move in June. However this is only one input into Norges Bank's thinking, and the fall in oil prices since the middle of last year, and the fact the Fed is reaching the peak, suggest Norway is unlikely to move as aggressively as some of its European peers over coming months. Francesco Pesole GBP: First-quarter contraction looks more likely The UK published GDP numbers this morning and it's a very tough read. Most, if not all, of that 0.5% contraction can be blamed on either strikes (transport & health were both heavy drags) or a lack of Premier League football games in December due to the World Cup. However, the fact that the weakness in the fourth quarter was concentrated in December means the starting point for the first quarter is lower, and almost certainly means we'll get a contraction even if activity through the quarter effectively stagnates. Our own view is we'll get a 0.3-0.4% fall in GDP in the first quarter, and probably a slight fall in the second. Recession still looks narrowly the base case. However, next week’s wage figures are what the Bank of England policymakers will watch much more closely as they assess signs of “inflation persistence”. As discussed by our economics team here, wages and developments in the service sector can make or break a March rate hike. For now, our house call is one last 25bp increase in March. EUR/GBP seems to have lost some of its bearish momentum. As discussed recently, we do not see clear drivers of GBP outperformance and a return to levels above 0.8900 in the pair is our base case. Francesco Pesole Read next: Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner| FXMAG.COM CEE: Inflation reminder Today, we have the first January inflation figures in the calendar. In Hungary, inflation rose from 24.5% to 25.7% year-on-year, beating all estimates, which means an upside surprise by 0.5pp. Later, we will see inflation in the Czech Republic, also expected to rise from 15.8% to 17.6% YoY, above market expectations. As always in recent months, the main issue is energy prices, which we believe saw a massive repricing in January. Also today, the Czech National Bank will publish the minutes of its last meeting as well as the complete new forecast including the alternative scenario preferred by the Board at the moment. This assumes a longer period of stable rates and a first cut only at the end of the year. In the FX market in the region, global factors were again in charge in recent days and apart from the Polish zloty, the CEE region returned to gains. The turnaround in EUR/USD together with gas prices testing new lows and further improvement in sentiment in Europe drove the Czech koruna and Hungarian forint to new lows against the euro. Moreover, higher inflation today should support domestic rates in our view and support both currencies. However, in both cases we see heavy long positioning already, which will make the path to further gains more complicated. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The USD/CAD Pair Is Expected A Further Downside Movement

TeleTrade Comments TeleTrade Comments 13.02.2023 08:47
USD/CAD consolidates the biggest daily slump in over a month. 61.8% Fibonacci retracement triggers corrective bounce amid oversold RSI. 200-HMA joins sluggish MACD signals to probe Loonie pair buyers. USD/CAD retreats from intraday high as buyers struggle to overcome the key Hourly Moving Average (HMA) during early Monday in Europe. Even so, the Loonie pair prints 0.20% intraday gains around 1.3375 as it pares the heaviest daily loss in five weeks, marked the previous day. The quote’s recovery could be linked to its bounce off the 61.8% Fibonacci retracement level of February 02-06 upside amid the oversold RSI (14) conditions. However, the 200-HMA level challenges the USD/CAD pair’s immediate upside near 1.3385. Given the bullish MACD signals, despite being sluggish of late, the Loonie pair may remain on the bull’s radar, suggesting a clear break of the immediate HMA hurdle surrounding 1.3385. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM Following that, 1.3415 may test the upside momentum before directing the USD/CAD bulls toward the two-week-old horizontal resistance area near 1.3470. In a case where USD/CAD remains firmer past 1.3470, it can aim for a late January swing high near 1.3520. Alternatively, the 61.8% Fibonacci retracement level, also known as the golden Fibonacci ratio, puts a floor under the USD/CAD prices of around 1.3340, a break of which highlights the 1.3300 round figure for the bears. Should USD/CAD breaks the 1.3300 round figure, the monthly low and November 2022 trough, respectively near 1.3260 and 1.3225, will gain the market’s attention. USD/CAD: Hourly chart Trend: Further downside expected
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Loonie Pair (USD/CAD) Probes The Two-Day Losing Streak At The Lowest Levels

TeleTrade Comments TeleTrade Comments 14.02.2023 08:59
USD/CAD holds lower ground at weekly bottom, pressured after two-day downtrend. Clear downside break of key EMA, Fibonacci retracement join looming bear cross on MACD to lure bears. Monthly resistance line, descending trend line from October challenge pair buyers. USD/CAD remains depressed around 1.3330 even as bulls and bears jostle during early Tuesday, due to the market’s inaction ahead of the key US inflation data. In doing so, the Loonie pair probes the two-day losing streak at the lowest levels in more than a week. It’s worth noting that the quote’s sustained downside break of the 100-day Exponential Moving Average (EMA) and the 61.8% Fibonacci retracement level of the September-October upside joins a looming bear cross on the MACD to keep USD/CAD sellers hopeful. As a result, a convergence of the ascending trend line from mid-November and the 200-day EMA, around 1.3270 by the press time, gains major attention. Should the pair offers a clear downside break of the 1.3270 key level, the last November’s low near 1.3225 may act as a validation point for the south-run targeting the September 2022 bottom surrounding 1.2955. It should be observed that the 1.3100 and the 1.3000 round figures may act as intermediate halts during the anticipated fall. Meanwhile, the stated key Fibonacci retracement level, also known as the golden ratio, guards immediate USD/CAD rebound near 1.3345, a break of which highlights the 100-day EMA level of 1.3410. Following that, a descending resistance line from January 19 and a four-month-old downward-sloping trend line, respectively around 1.3455 and 1.3530, could challenge the USD/CAD bulls. USD/CAD: Daily chart Trend: Further downside expected remaining time till the new event being published U.S.: Leading Indicators
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

TeleTrade Comments TeleTrade Comments 15.02.2023 08:47
USD/CAD regains positive traction on Wednesday and is supported by a combination of factors. Sliding crude oil prices undermines the Loonie and acts as a tailwind amid sustained USD buying. The prospects for more rate hikes by the Fed and the risk-off mood benefit the safe-haven buck. The USD/CAD pair catches fresh bids on Wednesday following the previous day's post-US CPI volatility and sticks to its intraday gains heading into the European session. The pair trades around the 1.3365 region, up nearly 0.25% for the day, and is supported by a combination of factors. Weaker crude oil prices undermine the commodity-linked Loonie, which, along with broad-based US Dollar strength, acts as a tailwind for the USD/CAD pair. Investors now seem worried that economic headwinds stemming from rising borrowing costs will dent fuel demand. Apart from this, signs of another massive build in US crude inventories weigh on the black liquid. In fact, the American Petroleum Institute (API) report showed on Tuesday that US crude stockpiles grew over 10 million barrels in the week to February 10. The USD, on the other hand, stands tall near a multi-week high amid firming expectations for further policy tightening by the Federal Reserve. In fact, the markets seen convinced that the US central bank will stick to its hawkish stance for longer in the wake of stubbornly high inflation. The bets were reaffirmed by the latest US CPI report released and hawkish commentary by several FOMC officials on Tuesday. This, along with the prevalent risk-off mood, benefits the safe-haven buck and lends support to the USD/CAD pair. The aforementioned fundamental backdrop favours bullish traders and suggests that the path of least resistance for the USD/CAD pair is to the upside. Hence, some follow-through positive move, back towards reclaiming the 1.3400 round-figure mark, looks like a distinct possibility. The focus now shifts to the US economic docket, featuring the release of monthly Retail Sales and the Empire State Manufacturing Index. Traders will further take cues from oil price dynamics to grab short-term opportunities around the pair. Technical levels to watch remaining time till the new event being published U.S.: Leading Indicators
USD/CAD - Canadian economy added 41,400 jobs beating expectations

A Modest US Dollar Weakness Weighs On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 16.02.2023 08:31
USD/CAD meets with some supply and extends the overnight pullback from the weekly high. An uptick in oil prices underpins the Loonie and exerts pressure amid modest USD weakness. Hawkish Fed expectations should help limit deeper USD losses and lend support to the major. The USD/CAD pair comes under some selling during the Asian session on Thursday and moves away from the weekly high, around the 1.3440 region touched the previous day. The pair currently trades around the 1.3380-1.3375 region and is pressured by a combination of factors. Crude oil prices gain some positive traction and snap a three-day losing streak amid hopes for a strong recovery in fuel demand. In fact, both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) forecast a rebound in crude demand later this year. This helps offset a substantial rise in the US crude inventories and acts as a tailwind for the black liquid, which, in turn, underpins the commodity-linked Loonie. Apart from this, a modest US Dollar weakness weighs on the USD/CAD pair. In fact, the USD Index, which tracks the Greenback against a basket of currencies, extends the overnight pullback from a six-week high amid retreating US Treasury bond yields. This, along with a generally positive tone around the equity markets, is seen denting demand for the safe-haven buck. That said, the prospects for further policy tightening by the Fed should limit the downside for the US bond yields and the USD. This, in turn, warrants some caution before positioning for any further depreciating move for the USD/CAD pair. Investors seem convinced that the US central bank will continue to hike interest rates in the wake of stubbornly high inflation. The bets were lifted by the US CPI report and hawkish comments by several Fed policymakers on Tuesday. Furthermore, the upbeat US monthly Retail Sales figures released on Wednesday indicated that the economy remains resilient despite rising borrowing costs. This should allow the Fed to stick to its hawkish stance for longer and supports prospects for the emergence of some USD dip-buying. Market participants now look forward to the release of the US Producer Price Index (PPI), due later during the early North American session. This, along with the US bond yields and the broader risk sentiment, will influence the Greenback. Apart from this, traders will take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

Further Upside Movement Of The Loonie Pair (USD/CAD) Is Expected

TeleTrade Comments TeleTrade Comments 17.02.2023 08:39
USD/CAD rises to the highest level in a month, braces for the biggest weekly gains since early December. Successful break of short-term key resistance lines, 200-SMA directs bulls towards 61.8% Fibonacci ratio. Sellers should remain cautious beyond four-day-old support line. USD/CAD takes the bids to a fresh monthly high near 1.3490 during early Friday. In doing so, the Loonie pair rises for the fourth consecutive day while preparing for the biggest weekly run-up since early December 2022. That said, the USD/CAD bulls cheer the upside break of a 12-day-old ascending trend line and one-month-old resistance line, now support, to keep buyers hopeful. Also favoring the USD/CAD bulls is the quote’s successful trading above the 200-SMA. Given the aforementioned technical breakouts and bullish MACD signals, the USD/CAD pair is well-set to poke the mid-January swing high surrounding 1.3520. The same encompasses the 61.8% Fibonacci retracement level of the pair’s January-February downturn. In a case where the USD/CAD remains firmer past 1.3520, the 1.3600 round figure may act as an intermediate halt before highlighting the previous monthly high of 1.3685 for the pair buyers. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM On the flip side, the 12-day-old previous resistance line and a downward-sloping trend line from January 19 put a floor under the USD/CAD prices of around 1.3480 and 1.3455 in that order. Following that, the 200-SMA and an ascending support line from Tuesday, respectively near 1.3400 and 1.3390, could act as the last defense of the USD/CAD buyers. USD/CAD: Four-hour chart Trend: Further upside expected remaining time till the new event being published U.S.: Leading Indicators
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The USD/CAD Pair Remains On The Bull’s Radar

TeleTrade Comments TeleTrade Comments 20.02.2023 08:33
USD/CAD remains pressured after retreating from six-week high. Upbeat oscillators, sustained trading beyond 50-DMA keep buyers hopeful. Convergence of 100-DMA, four-month-old descending resistance line challenge buyers. USD/CAD bulls take a breather around 1.3480, following the run-up to refresh the monthly high, as the upside momentum failed to cross the key resistance confluence the previous day. Even so, the Loonie pair remains on the buyer’s radar on early Monday as it defends the previous week’s upside break of the 50-DMA, close to 1.3465 at the latest. It’s worth mentioning that the 50-DMA breakout joins the bullish MACD signals, as well as the upbeat RSI (14), not overbought, to keep the USD/CAD buyers hopeful. That said, a one-week-old ascending support line, near 1.3440 by the press time, adds to the short-term downside filters for the USD/CAD pair traders to watch on the break of the 50-DMA. Following that, a three-month-old ascending support line, around 1.3280 as we write, becomes crucial to follow as it holds the key to the Loonie pair’s slump towards the 1.3000 psychological magnet. Meanwhile, an upside clearance of the 1.3520 resistance confluence enables the USD/CAD buyers to aim for the previous monthly high of 1.3685. In case where the quote remains firmer past 1.3685, the last December’s peak of 1.3705 may act as an extra check for the USD/CAD bulls before directing them to the October 2022 high surrounding 1.3980, as well as the 1.4000 round figure. To sum up, USD/CAD remains on the bull’s radar unless breaking 1.3440 support. USD/CAD: Daily chart Trend: Further upside expected
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

Analysis Of The USD/CAD Commodity Currency Pairs

InstaForex Analysis InstaForex Analysis 21.02.2023 08:22
If we look on the daily chart of USD/CAD commodity currency pairs there is a few interesting things as follows: 1. The appearance of Bullish 123 pattern followed by Ross Hook (RH), 2. There is a deviation between price movement with CCI indicator. 3. The appearance of Vegas pattern on CCI Histogram indicator (20). 4. Both Sidewinder indicator in green which means Volatile/ really trending. 5. Chopzone indicator in Blue/Cyan which means = Bullish Trend. 6. Zero Line indicator in green which means Bullish. Based on 6 facts above we can conclude that if The Loonie now is in a healthy Bullish condition so that in the nearest time Ross Hook 1.3537 will try to break by this commodity currency pairs, as long as there is no downward correction beyond the 1.3228 level, USD/CAD has the potential to appreciate to the 1.3705 level as the first target and if the volatility and momentum at The Loonie is still sufficient to support the bull movement then it is possible that the 1.3978 level will become the second target.   Relevance up to 06:00 2023-02-26 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119883
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Loonie Pair (USD/CAD) Buyers Cheer Downbeat Prices Of WTI Crude Oil

TeleTrade Comments TeleTrade Comments 21.02.2023 09:04
USD/CAD picks up bids to reverse the week-start losses but previous support line challenges the bulls. Geopolitical fears, return of full markets weigh on sentiment and underpin US Dollar rebound. Oil price bears the burden of firmer USD and fears of slow demand growth, higher inventories. Canada inflation eyed as BoC signaled a pause in rate hikes, US PMIs should be observed too. USD/CAD clings to mild gains near 1.3480 as it reverses the previous day’s losses during early Tuesday in Europe. In doing so, the Loonie pair buyers cheer downbeat prices of Canada’s key export item, WTI crude oil, as well as the full market’s favor to the US Dollar, ahead of the key US and Canadian statistics. WTI crude oil drops nearly 1.0% on a day as it renews its intraday low to near $76.60 by the press time. In doing so, the black gold reverses the previous day’s corrective bounce off a two-week low, the first in six days, amid fears of more supplies from the US and Saudi Arabia as Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said on Monday, “OPEC+ is flexible enough to change decisions whenever required.” Elsewhere, fears emanating from China, North Korea and Russia seemed to have joined the fresh run-up in the US Treasury bond yields, amid hawkish hopes from the US Federal Reserve (Fed), to underpin the US Dollar rebound. That said, the US and China alleged each other over the balloon shooting whereas the US diplomatic ties with Taiwan teased Beijing on Monday. On the same line, the United Nations (UN) Security Council is alarmed by Japan for North Korea’s missile testing and could help the US Dollar to remain firmer due to its safe-haven status. It should be noted that the US Dollar Index (DXY) snaps a two-day losing streak while marking mild gains near 104.00. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury bond yields, as well as benefits from the traditional haven status. That said, the US 10-year Treasury bond yields pick up bids to near the highest levels marked since early November 2022, mildly bid around 3.86% at the latest. While portraying the mood, S&P 500 Futures declined 0.40% intraday to 4,070 at the latest. Looking forward, the Canadian Consumer Price Index (CPI) for January, as well as the Bank of Canada (BoC) CPI Core for the said month, will be observed closely for immediate directions as the BoC has already teased a pause in the rates. As a result, softer prints of inflation data may allow the BoC to announce the policy pivot and propel the USD/CAD. On the other hand, the preliminary readings of the US Purchasing Managers Index (PMI) data for February will be important for the US Dollar ahead of Wednesday’s Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes. Given the recently hawkish bias for the Fed, versus the BoC’s dovish tone, the USD/CAD is likely to witness further upside unless the Oil prices witness a strong rally. Technical analysis A one-week-old support-turned-resistance line near 1.3490 guards the USD/CAD pair’s immediate upside ahead of the 61.8% Fibonacci retracement level of the pair’s December 2022 to February 2023 downside, near 1.3540 at the latest. Meanwhile, the USD/CAD bears may aim for the 200-Simple Moving Average (SMA), close to 1.3400 by the press time, as an immediate target during the quote’s fresh downside past the latest low of 1.3440. Following that, the monthly bottom surrounding 1.3260 will be in focus.
Sharp drop in Canadian inflation suggests rates have peaked

The Loonie Pair Struggles To Defend USD/CAD Bulls

TeleTrade Comments TeleTrade Comments 22.02.2023 09:12
USD/CAD seesaws around six-week high after rising the most in three weeks the previous day. Descending resistance line from early November 2022 guards immediate upside. Upside break of 100-DMA, four-month-old trend line keeps buyers hopeful. USD/CAD grinds near a 1.5-month high during early Wednesday, after crossing the key moving average and resistance line the previous day. That said, the Loonie pair struggles to defend USD/CAD bulls as a downward-sloping resistance line from early November 2022, close to 1.3555 at the latest, challenges the immediate upside of the quote. The upbeat performance of the USD/CAD price could be linked to the strong RSI (14), not overbought. It should be noted, however, that the January 2023 peak surrounding 1.3685 and late 2022 top near 1.3705, could act as the last defense of the USD/CAD bears. As a result, the USD/CAD upside appears to have limited room towards the north. Meanwhile, a daily closing below the 100-DMA and the previous resistance line from early October 2022, respectively near 1.3515 and 1.3505, precede the 1.3500 round figure and could recall the USD/CAD bears. Following that, the 50% Fibonacci retracement level of the pair’s August-October 2022 upside, near 1.3355, will challenge the USD/CAD bears before directing them to the 200-DMA and the 61.8% Fibonacci retracement level of 1.3210, also known as golden Fibonacci ratio. Overall, USD/CAD remains on the bear’s radar even as the road to the north appears bumpy. USD/CAD: Daily chart Trend: Further upside expected
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Future Movement Of The Loonie Pair (USD/CAD) Might Be Downside

TeleTrade Comments TeleTrade Comments 23.02.2023 08:39
USD/CAD holds lower ground near intraday low, snaps two-day uptrend. Bearish MACD signals, downbeat RSI hints at further downside of the Loonie pair. Convergence of 100-HMA, support line of two-week-old ascending triangle restricts short-term declines of the USD/CAD pair. USD/CAD drops 0.25% intraday during the first loss-making day in three heading into Thursday’s European session. In doing so, the Loonie pair drops to 1.3520 by the press time. That said, the USD/CAD pair’s latest moves appear forming a fortnight-old ascending triangle formation. The same joins downbeat RSI (14) and bearish MACD signals to favor the bearish chart formation. However, a clear downside break of 1.3500 becomes necessary as the 100-Hour Moving Average (HMA) joins the stated triangle’s lower line to increase the strength of the stated support confluence. Following that, tops marked during late January and early February, respectively near 1.3520 and 1.3475, could probe the USD/CAD bears before directing them to the theoretical target surrounding 1.3200. On the contrary, USD/CAD buyers may aim for the latest swing high surrounding 1.3570 before poking the stated triangle’s top line, close to 1.3585 by the press time. In a case where the Loonie pair remains firmer past 1.3585, the bearish chart formation gets defied as the bulls brace for a late 2022 swing high surrounding 1.3700. To sum up, USD/CAD slips off bull’s radar but the sellers await clear break of 1.3500 to retake control. USD/CAD: Hourly chart Trend: Limited downside expected
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The USD/CAD Pair Traders May Witness Lackluster Moves Ahead

TeleTrade Comments TeleTrade Comments 24.02.2023 08:51
USD/CAD picks up bids to pare day-start losses, reverses the previous day’s pullback from seven-week high. Oil price cheers hopes of economic recovery, geopolitical tension amid sluggish session. Talks surrounding Fed concerns join mixed moves of bond market to probe Loonie traders. USD/CAD grinds near intraday high as it reverses the day-start losses, as well as dialing back the previous day’s u-turn from a seven-week high, around 1.3545, heading into Friday’s European session. In doing so, the Loonie pair fails to justify the firmer prices of Canada’s main export item, namely WTI crude oil. That said, the black gold rises 0.65% intraday to $76.15 by the press time, extending the previous day’s rebound from the two-week low. While tracing the reasons, the recently firmer statistics from the US and Europe, as well as other major economies, join China’s readiness to infuse the economy towards more output to propel Oil prices. Additionally favoring the WTI bulls are the news suggesting more geopolitical tensions surrounding Russia and Ukraine, as well as the Sino-American tussles. Elsewhere, the US Dollar Index (DXY) snaps a three-day uptrend as it grinds near 104.55 while DXY bulls struggle for clear directions after refreshing a seven-week high the previous day. The US Dollar’s latest weakness could be linked to the dicey markets as the market’s fears that the strong US data and further Federal Reserve (Fed) rate hikes are already priced in. The same seemed to have weighed on the US Treasury bond yields. On the same line could be the mixed headlines surrounding China, due to its peace plan for Ukraine and ties with Russia, as well as due to the US-China readiness for trade talks, despite not sharing the details and criticizing each other on various issues. Against this backdrop, the S&P 500 Futures fade recovery moves from the monthly low by retreating to 4,015, down 0.10% intraday at the latest. Further, the US 10-year Treasury bond yields seesaw around 3.86%, making it less active on the day, whereas the US two-year bond coupons stay inactive near 4.69% by the press time. Given the dicey markets and cautious mood ahead of the key US data, namely the US Personal Consumption Expenditures (PCE) Price Index for January, the USD/CAD pair traders may witness lackluster moves ahead. However, hawkish hopes from the Fed’s preferred inflation gauge may not hesitate from disappointing the Loonie pair buyers if printing downbeat numbers. Also read: US PCE Inflation Preview: Can the US Dollar turn bullish for good? Technical analysis Although Thursday’s bearish spinning top lures the USD/CAD sellers, the nearness to the 100-DMA support of 1.3510 and bullish MACD signals suggest limited downside room for the pair
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Path Of Least Resistance For The USD/CAD Pair Is To The Upside

TeleTrade Comments TeleTrade Comments 27.02.2023 09:54
USD/CAD attracts some dip-buying on Monday and draws support from a combination of factors. Sliding Oil prices undermines the Loonie and acts as a tailwind for the pair amid a stronger USD. The fundamental backdrop favours bullish traders and supports prospects for a further move up.  The USD/CAD pair attracts some buying following an intraday dip to sub-1.3600 levels on Monday and hits a fresh daily high during the early European session. The pair is currently placed around the 1.3625 region, though remains below its highest level since January 6 touched on Friday. Crude Oil prices meet with a fresh supply on the first day of a new week, which is seen undermining the commodity-linked Loonie and lending support to the USD/CAD pair. Worries that rapidly rising borrowing costs will dampen economic growth and dent fuel demand overshadow the prospect of lower exports from Russia. This, in turn, fails to assist Oil prices to build on a two-day-old recovery move from a nearly three-week low touched last Thursday. Apart from this, bets that the Bank of Canada (BoC) will pause the policy-tightening cycle, bolstered by softer Canadian consumer inflation figures released last week, weighs on the domestic currency. In contrast, the Federal Reserve is expected to stick to its hawkish stance in the wake of stubbornly high inflation. This, along with a softer risk tone, keeps the safe-haven US Dollar pinned near a multi-week high and acts as a tailwind for the USD/CAD pair. The prospects for further policy tightening by the Fed were reaffirmed by the stronger US PCE data on Friday, which indicated that inflation isn't coming down quite as fast as hoped. Adding to this, the incoming positive US macro data points to an economy that remains resilient despite rising borrowing costs and fueled hawkish Fed expectations. This remains supportive of elevated US Treasury bond yields and continues to boost the Greenback. Read next: Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over| FXMAG.COM The aforementioned fundamental backdrop seems tilted firmly in favour of bulls and suggests that the path of least resistance for the USD/CAD pair is to the upside. Further, the technical picture also indicates a bullish continuation pattern may has formed after Friday's strong up day, which also helped to confirm the major trendline break of the previous two sessions. This continuation pattern could see prices rise up to the 1.3800 level conditional on confirmation from a break above Friday's high at 1.3665.  Market participants now look to the US economic docket, featuring the release of Durable Goods Orders and Pending Home Sales data. This, along with Oil price dynamics, should provide a fresh impetus to the USD/CAD pair and allow traders to grab short-term opportunities.
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Loonie Pair (USD/CAD) Remains On The Bull’s Radar

TeleTrade Comments TeleTrade Comments 28.02.2023 08:37
USD/CAD picks up bids to reverse the week-start pullback from monthly top. Cautious optimism underpins WTI rebound amid sluggish session. US Dollar remains on the way to posting the first monthly gain in five amid hawkish Fed concerns. Canada's Q4 GDP could help Loonie pair buyers on matching downbeat forecasts. USD/CAD prints a gradual rebound from intraday low amid a sluggish end to February, picking up bids to 1.3585 heading into Tuesday’s European session. In doing so, the Loonie pair fails to justify the recent rebound in Canada’s key export item, namely WTI crude oil, as traders brace for the fourth quarter (Q4) Canadian Gross Domestic Product (GDP) data. That said, the WTI crude oil bulls attack $76.00 while the refreshing intraday top, as well as reversing the previous day’s pullback from a one-week high. It should be noted that he hopes of easing US-China tension and hopes of upbeat inflation, as well as manufacturing activity in China, add strength to the black gold’s latest rebound. On the other hand, the US Dollar Index (DXY) prints mild gains around 104.80, following a downbeat start of the week, as greenback bulls cheer hawkish Fed bets despite mixed US data amid an unimpressive day so far. Talking about the risk catalysts, market sentiment improves on headlines suggesting the fact that the US offers an olive branch to Chinese companies despite its political differences with the dragon nation. “Despite fraying relations with Beijing, US President Joe Biden is expected to forego expansive new restrictions on American investment in China, denying a push by some hawks in his administration and Congress,” reported Politico late Monday. However, US National Security Advisor Jake Sullivan’s comments on China suggest that the political tussle among the world’s top two economies stays on the table. “China’s stance on the Russian invasion of Ukraine puts it in an “awkward” position internationally and any weapons support to Russia would come with ‘real costs,’” said US Security Adviser Sullivan on CNN’s “State of the Union” on Monday. That said, mixed US data jostled with the hawkish Fed speak and the US-China tension contributed to the lack of market clarity. That said, US Durable Goods Orders slumped -4.5% in January versus -4.0% expected and 5.1% prior. However, the Nondefense Capital Goods Orders ex Aircraft grew 0.8% versus 0.0% analysts’ expectations and -0.3% previous readings. On the same line, the US Pending Home Sales rallied 8.0% MoM versus 1.0% expected and 1.1% prior. At home, Canada’s Q4 Current Account Deficit grew to -10.64B versus -8.41B. Against this backdrop, the S&P 500 Futures print mild gains around 3,995, extending the week-start rebound from the monthly low, whereas the US two-year Treasury yields remain sidelined near 4.79% after reversing from a three-month high on Monday. That said, the US 10-year Treasury bond coupons seek clear directions near 3.92% following a downbeat start of the week. Looking ahead, Canada’s Q4 GDP Annualized, expected to ease to 1.5% versus 2.9% prior, could keep the USD/CAD buyers hopeful. Also important to watch will be the second-tier US data, namely Conference Board’s Consumer Confidence, Chicago Purchasing Managers’ Index and Richmond Fed Manufacturing Index for February, as well as the preliminary US trade numbers for January. Technical analysis Unless dropping back below the previous resistance line from early November, around 1.3570 by the press time, USD/CAD remains on the bull’s radar.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

There Is A Strong Chance Of The Canadian Economy Tipping Into A Recession By Mid-2023

Kenny Fisher Kenny Fisher 28.02.2023 14:57
Canadian GDP expected to slow in Q4 It’s a very light data calendar for Canadian releases this week, with today’s GDP report the sole tier-1 event. Canada’s economy is expected to slow to 1.5% y/y in the fourth quarter, following a solid 2.9% gain in Q3. A slowdown in economic activity is what the Bank of Canada is looking for, as inflation remains public enemy number one.  CPI is moving in the right direction as it fell to 5.9% in January, down from 6.3% in December. The BoC is optimistic that the downturn will continue, with a forecast that inflation will fall to 3% by mid-2023 and hit the 2% target by the end of the year. The BoC will have to tread carefully in this tricky economic landscape. The economy is cooling and while inflation is easing, it remains much higher than the 2% target and will require additional rate hikes which will make a soft landing a difficult endeavour. If growth continues to weaken in 2023, there is a strong chance of the economy tipping into a recession by mid-2023. The Bank meets next on March 8 and the markets are expecting a 0.25% hike for the second straight time. The Bank would like to take a pause in its tightening cycle but this will require a substantial drop in inflation. In the US, strong employment and consumer data and stubborn inflation have supported the Fed’s hawkish stance and there is talk of the Fed raising rates as high as 6%. It was only a few weeks ago that the markets were talking about a ‘one and done’ rate hike in March, followed by a long pause and perhaps some cuts by year’s end. This has all changed as the US economy has proven to be surprisingly resilient, despite rising rates and high inflation. The markets are currently pricing in three more rate hikes this year, but that could change in a hurry if key releases in February show that the economy is slowing down.   USD/CAD Technical There is resistance at 1.3701 and 1.3794 1.3570 is under strong pressure in support. 1.3478 is the next support line This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The USD/CAD Pair Is Likely To Register Further Downside

TeleTrade Comments TeleTrade Comments 01.03.2023 08:58
USD/CAD takes offers to renew intraday low, reverses from “double top”. 100-HMA, two-week-old ascending trend line restrict immediate downside. RSI’s pullback from overbought territory, bearish MACD signals favor sellers. 200-HMA, 1.3530 act as crucial supports for Loonie pair bears to watch. USD/CAD welcomes March with a bearish bias as it renews its intraday low near 1.3620 during early Wednesday morning in Europe. That said, the Loonie pair marked the biggest daily gain in a week the previous day, as well as posted the heaviest monthly jump since September 2022 by the end of February. The quote’s latest pullback could be linked to its inability to cross the late February swing high of 1.3665. In doing so, the pair portrays the double top around 1.3660-65 region. The chart formation also takes clues from the bearish MACD signals to lure sellers. On the same line could be the RSI (14) pullback from the overbought territory. Hence, the USD/CAD pair is likely to register further downside. However, a convergence of the 100-Hour Moving Average (HMA) and an upward-sloping support line from mid-February, near 1.3580, appears a tough nut to crack for the bears. Also adding to the downside filter are the 200-HMA and the weekly low, respectively near 1.3540 and 1.3530. In a case where the USD/CAD drops below 1.3530 support, the pair confirms the bearish “double top” chart formation, which in turn suggests the theoretical fall towards 1.3400. Alternatively, a sustained break of the 1.3660-65 hurdle could aim for January’s peak of 1.3685 and the last December’s high near 1.3700 before allowing the USD/CAD bulls a free zone to rule. USD/CAD: Hourly chart Trend: Limited downside expected