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Fed Protocol, BoC, and the UKAs we all know “the market is addictive to news”, it is not wondering that yesterday’s testifying to Congress by Fed Chair Jerome Powell, the announcement of the Bank of Canada decision on monetary policy, as well as a fairly extensive block of statistical data from the UK, led to increased volatility in financial markets. Let's analyze these events in chronological order. Great Britain relaxed quite positive data, which triggered the pound growth. Recall, we recommended its purchases, so those of our readers who looked up to our advice made good money. GDP and industrial production value have increased we cannot but mention the data on construction and trade balance that pleasantly surprised, appeared much better than forecasts. Bank of Canada holds interest rate steady, Federal Reserve Chairman Jerome Powell said that rate cut is not a panacea. Jerome Powell’s testimony at Congress. Markets expected him to make statements/comments about the Fed rate cut. However, Powell noted that the risks remain steady for the US economy, due to business investment slow down caused by the trade war, while inflation remains weak, which suggests that interest rates might be reduced this month. After Powell's testimony, the minutes of the last FOMC Fed meeting were published. Which only strengthened markets confidence in lowering the rates in the USA. The discussion of the Fed members about the prospects for monetary policy at the last meeting showed that there is a strong bias towards cut rates. The result is a short dollar. But inflation statistics from the US, as well as the second day of Powell’s testimony, may well trigger a rise in volatility in pairs with the dollar. Our trading recommendations for today are as follows. We continue to look for opportunities for selling the dollar (USDJPY, EURUSD, GBPUSD). Sell the Russian ruble. We are looking for points for sales of gold, which again climbed very high.
Long
by Trade24Fx
Loonie Crosses and BoCBy Andria Pichidi - July 10, 2019 Bank of Canada’s announcement is expected to result in no change in rates and a repeat of the data-driven mantra. Given that recent data has been consistent with their ongoing view that the economy is on the mend from the Q4/Q1 weakness, the takeaway should be for continued steady policy through year end. For example, the latest data was yesterday with Canada’s housing starts and permits showing a well-supported market through mid-year. Housing starts surged 24.8% to 245.7k in June after falling to 196.8k in May from 230.7k in April. The “trend” in housing starts (6-month moving average) improved to 205.8k in June from 200.5k in May. Meanwhile, the separate permit value measure plunged 13.0% in May after jumping 16.0% in April. The BoC also releases the Monetary Policy Report alongside the announcement, followed by Governor Poloz’s usual Q&A with the press. While the Fed and ECB have leaned dovishly recently, spurring market hopes for more easing, we do not expect the BoC to join the club. Recent economic data has come in close to the BoC’s expectations, tracking an improving economy. Trade uncertainty remains a hefty source of downside risk, but it is also a potential upside risk too (if/when the US and China finally reach an agreement). The currently accommodative policy setting is providing ample stimulus to an economy that is well into the recovery phase. Economic data is housing related this week. Currency Market USDCAD rallied to 1.3140 yesterday, up from last week’s lows of 1.3036. The move came on general USD strength, which has been maintained since last Friday’s US jobs report, and on the lack of Oil price follow through gains. In June the USDCAD has dropped by nearly 530 pips, however in the long-term picture is following an upwards path, since August 2017 from 1.2060 lows. Despite June’s underperformance, the latest weekly doji candle along with the bounce this week above 200-week SMA, spread some hopes for a potential recovery of the pair. However, this scenario hasn’t been confirmed yet. A reversal to the upside could be suggested only if a morning star pattern is formed along with a move above 50-day SMA at 1.3240. Support holds at the bottom of the weekly channel and the June’s low at 1.3036. Intraday, Resistance holds at 1.3045-1.3060 (9-day high and 23.6% Fib. since May 31). Support is set at 1.3100. The daily technical indicators are weak, as RSI and MACD have been configuring below neutral, however, they present slight strengthening of positive bias as RSI is at 40 from 31 low and MACD lines are above signal line. USDCAD weekly and Daily AUDCAD, on the other hand, broke the 8 years’ Support at the 0.9100 level, as bears look to be in full control this year. Currently it extends its Bollinger Bands further to the downside in the medium and long term charts, below 20- , 50- and 200-month SMA. Meanwhile, technical indicators have been negatively configured, as negative bias seems to get stronger and stronger. All the above suggest that the pair has a lot of downwards path to cover, while the break of the 0.9100 level opened the doors towards 2010 lows. AUDCAD Monthly and Weekly CADCHF has continued moving lower for a second consecutive day after the peak seen at 0.7611 on Monday. The move came in general on the anticipation of BoC statement. Overall, the CADCHF’s lookout remains positive with RSI sloping above 50 the past 2 weeks, while MACD spiked well above signal line within the positive territory. This suggests further positive bias in the medium term. In the near term meanwhile, the 2 days’ weakness looks to be a correction on the sharp rally seen since June 25, as the asset holds well above 20-, 50- and 200-day SMA but also the midpoint (50% Fib level) of the 2-weeks’ incline. Support holds at 0.7535-0.7545 intraday and Resistance is set at 0.7572. CADCHF Daily Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Short
by HotForex
1
GBPCAD - Pullback. Time to double up the profitsGet ready for a pullback in price correction. Pretty great trade setup leading right into the ABCD pennant. Refer to linked old idea. If you are new I suggest looking at the old one as well. The more you see how I trade...the easier it will be for you to follow. Remember there is never an exact price..but a zone of prices..use these zones, news, and market sentiment/technical analysis to your favor. These are your weapons. Use them all.
Short
by AschraM
Getting long USDCADThose who have been following the current USDCAD call (see attached: "Oil weighing heavy on CAD") will know we are already positioned in longs here. So what we are trying to do is add another position on a "sell the fact leg" in oil after cuts on the supply side are fully cooked in ... (so time to start working the sell-side again there.) The dollar is also approaching buy levels and as a result buying the retrace leg here in USDCAD is a good opportunity. Lets see how it plays out (For those wondering red fib is from a previous swing and can be ignored I am publishing this on the way back to the office)
Long
by ridethepig
USDCAD: Major topping patternI think $USDCAD might be ready to trend down from here and fulfill the long term chart pattern implications. A long term decline back down to the mode in the 6-month timeframe is possible, but won't be a straight line down naturally. Ideally one would seek to short it when it gets overbought in weekly charts, for example, and aim to cover once oversold...rinse and repeat. This will provide countless trading opportunities for those who are patient and know how to read charts using Key Hidden Levels and Time@Mode. Cheers, Ivan Labrie.
Short
by IvanLabrie
Trading the CAD pullback=> This week we have BoC on deck with a widely anticipated rate hike. The sales and consumer prints last week came in softer than anticipated and we see this as a great valuation driven pullback. => Here we are targeting the recent highs with stops at the lows. From a technical point of view we can see the early longs had their stops run on the data pullback. => For the longer term Canada remains in great shape, with almost completely free trade by the end of the decade on track. => From a capital flow perspective, funds have been hesitant to get long CAD via oil. The aim here is we are isolating the oil risk via an inline/neutral Norges Bank. => Best of luck to all those trading BoC this week.
Long
by ridethepig
BoC on Deck this month ... fading corrective rallies in USDCAD=> We still maintain our USDCAD short position from earlier in the week and recommend selling all corrective rallies here ahead of the BoC rate hike widely expected this month. => Although the rate hike is expected this trade is far from crowded and we see incoming data to keep the BoC on track with tightening monetary policy. => Odds of any hikes are close to 90% probability (in other words it is a done deal) which makes complete sense considering that the decreased political uncertainty allows the BoC to completely focus on better fundamentals when setting policy (a rarity in this world...) => We are expecting payrolls to reach 195k and average hourly earnings expected to come in at 2.9% YoY. => Markets are expecting a better outcome, especially considering the price action we've seen in US yields and the USD via ADP and ISM employment components. => Good luck all trading this live
by ridethepig
1
USDCAD: Low risk long entry...I like the $USDCAD pair here for a swing trade opportunity, given the trend in the $DXY chart, and in the $EURUSD and $USDJPY pairs, as well as movement in oil and gold, I reckon the trade has very good odds. Market participants have been pricing in the fact that the Fed won't hike rates again this year, but it isn't clear if that will be the case or not. Either way, the technical picture is clear, and given the economic growth in the US, this trade has decent odds of panning out favorably. Best of luck, Ivan Labrie.
Long
by IvanLabrie
6
Buying The USD/CAD From Macro Fibonacci SupportIn the event the USD/CAD closes negative, it will mark the third straight red candlestick on the daily chart. July has extended the negative sentiment of late June, with price seemingly on a collision course with the 1.3000 handle. If we see a continued fall, then a buy from just above the macro 62% Fibonacci retracement is good trade location to the bull. Here is the trade: 1)Entry: Buy 1.3036 2)Stop Loss: 1.2994 3)Profit Target: 1.3082 4)Risk vs Reward Ratio: 1/1 The optimal timing for this trade is before the Monday forex session close. However, the recommendation will remain valid until Wednesday’s BoC Interest Rate Announcements. If it hasn’t gone live by that time, pull the orders.
Long
by FXLeaders
Long USDCAD Trading PlanUSD Bullish Rationale : 1. Optimism tax reform bill 2. It's been said that the market have fully priced in December interest rate hike but this "certainty" seems to ease investors in betting Dollar strength at the moment 3. Personally, I see no reason as of now to be bearish the dollar CAD Bearish Rationale : 1. I am expecting the effect of Dovish CAD is not in the price yet hence plenty more to the downside for CAD Factors could invalidate the trading plan : 1. Any positive development in the oil market (Oil Rally is generally supportive to the CAD) 2. CAD - Positive (Actual > Expected) Building Permit numbers with massive deviation (Expected : 1.7%, Prior : 3.8%) - Predicted Surprise : 1.60% (Reuters Poll) 3. CAD - Positive (Actual > Expected) Ivey PMI numbers with massive deviation (Expected : 62.7, Prior : 63.8) 4. USD - Negative (Actual > Expected) Initial Job Claims Numbers with massive deviation (Expected : 240k, Prior : 238k) - Reuters SmartEstimate (C) : 237.4k Levels to trade : A : If price breaks and close above 128.100, I will Long the pair as long as I have the minimum 2:1 reward/risk ratio. The target price rationale are : a) it is within the average daily range b) psychological level (i.e 00s) c) B : I will not rule out a correction towards the daily pivot. In the event of this happening, I will look for technical reason to Long this pair. The target price rationale are : it is within the average daily range b) It is potentially today's high
Long
by sufiansaid
USDCAD Bank Of Canada Rate - REVIEWSo BOC, despite of the positive economic data past few months, remained "cautious" about them stepping off the gas even further (aka raising interest rates). It took me several seconds to speed read the statement, digest it, intepret it and make an actionable plan based on that information. At the time, I thought it was pretty dovish, not VERY dovish.. but dovish enough. I looked at the chart price have moved considerably high as well, but based on my research events like this tend to hit 100-120 pips. So i took a "scalping" trade and made a target at 1.2800. I made 2% from this trade. *I apologize for the written mistakes I made in my CAD trading plans.
by sufiansaid
2