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Gbp-cad

GBP-CAD might re-enter the historic 4 year range!UK inflation at 10,5% sparkled a rally in GBP that might continue for several days, pushing GBPCAD into the historical range 1,68 / 1,76. Inflation data that were published 2 days ago confirmed that UK is still laggin in its figth against inflation. Canada's inflation on the other hand has already decreased substantially since June 2022. Technically GBP-CAD has been trading in clear range for 4 years: 2018 to 2022, the lowest of this range has already be attacked and now we are aiminng at it again. If we re-enter the 4 years range we will most likely target the middle of the range at around 1,72. This offers us a trade with a decent 3:1 risk reward.
Long
by SBtrader82
6
FX + ECONOMY | EVENT - WEEKLY PREVIEW | KW03 |In today's article, we will go into all the important events, which are scheduled in the economic calendar, for the next week. > Calendar week | 03 - - - 16. January 2023 – 20. January 2023 Let's briefly discuss what the listed events mean for your personal trading. > When you want to trade a currency pair, you should always be careful that you do not accidentally get into an "event". > These events can end in random volatility, which technical analysis does not respect, and therefore a possible loss. > A strategy of "Market-Makers" is to liquidate both sides (short | long) to the event and then continue the participated direction. MONDAY > CAD | 10:30 p.m. | BOC = Business Outlook Survey TUESDAY > GBP | 02:00 a.m. | Employment change + unemployment rate > EUR | 05:00 a.m. | GER Harmonized Index of Consumer Prices > CAD | 08:30 a.m. | CPI = Consumer Price Index > USD | 08:30 a.m. | Change in manufacturing index WEDNESDAY > GBP | 02:00 a.m. | CPI = Consumer Price Index > USD | 08:30 a.m. | Retail Sales > AUD | 07:30 p.m. | Employment change + unemployment rate THURSDAY > Nothing to relevant FRIDAY > CAD | 08:30 a.m. | Retail sales Wednesday will be among certainly the most volatile, with the release of the American "retail sales", at 08:30. MARKET INFLUENCE Each of these dates, leads in the respective currency pair, to high / moderate volatility. > Events that make the overall market volatile are mostly related to the USD. = This is due to the fact that the USD has a position as an indirect world currency through global acceptance and thus has significant influence on the other currency pairs / economy. To use an example to explain the influence of the USD on other currency pairs, let's look at the DXY (USD index). The DXY is composed of the pairs: EUR (57.6%), JPY (13.6%), GBP (11.9%), CAD (9.1%), SEC (4.2%) + CHF (3.6%) When a positive metric is published for the USD = its value rises. = The pressure on the currencies in the DXY basket increases. = Thus they are "negatively" valued by traders. = Sell-off In summary, the higher the country's opinion on the global economy, the greater impact it takes on the overall market. > Feel free to share in the comments, about the impact of this week's appointments. > Sharing your perspective allows each of us to improve. If this explanation has added value to you, I would be very happy to receive a rating. Thank you and happy trading! ZIEL IST DIE AUTARKIE | THE GOAL IS SELF-SUFFICIENCY
TVC:DXY
by ZielIstDieAutarkie
GBPCAD Potential for Bullish RiseLooking at the H4 chart, my overall bias for GBPCAD is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market. Looking for a pullback buy entry at 1.62337, where the 50% Fibonacci line and liquidity hot spots are. Stop loss will be at 1.61034, where the previous swing low is. Take profit will be at 1.64258, slightly above where the 38.2% Fibonacci line is. Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Long
by VantageMarkets
GBPCAD can retrace lower? 🦐GBPCAD on the 4h chart after the recent test of the weekly resistance dropped at the 0.382 Fibonacci Level. The price is now testing a support area and we can expect some deeper retracement. How can i approach this scenario? I will wait for the European market open and IF the market will break and close below the structure i will consider a nice short order according to the Plancton's strategy rules. ––––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
by InkyGrip
4
💷GBP/CAD Get Ready For It💷GBP/CAD Get Ready For It 💷Everything looks like GBP/CAD has no intention of making a correction any time soon. 💷 There is a resistance zone ahead which I believe will be broken through. 💷 If this happens the way will be opened to the strongest resistance zone ahead. 💷The first resistance zone was determined by two fibo levels. The first is 0.618 of the entire downward wave from the 2008 peak to the 2022 bottom. The second level is 0.382 of the entire downward wave from the 2015 peak to the 2022 bottom. 💷The second stronger resistance zone was determined by a cluster of up to three levels. The first level is 0.786 of the entire downward wave from the 2018 peak to the 2022 bottom. The second level is 0.5 of the entire downward wave from the 2015 peak to the 2022 bottom. The third level is 0.236 of the entire downward wave from the 1998 peak to the 2010 bottom. 💷The support zone is around the 0.5 level of the entire downward wave from the 2018 peak to the 2022 bottom. 💷The scenario I'm playing out is a continuation of the upside with a breakout of the first resistance zone and then a continuation of the upside to the second. I'm aware of the possibility of a correction at any time, this should be taken into account, If the outlook changes I will publish a post with an update, so I encourage you to actively follow the profile and read the description carefully. 🚀If you appreciate my work and effort put into this post then I encourage you to leave a like and give a follow on my profile.🚀
Long
by InvestMate
6
Joe Gun2Head Trade - Bullish channel on GBPCADTrade Idea: Buying GBPCAD Reasoning: Trading in a bullish channel in the short term. Looking for higher prices. Entry Level: 1.6145 Take Profit Level: 1.6297 Stop Loss: 1.6075 Risk/Reward: 2.35:1 Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Long
by Signal_Centre
InvestMate|GBP/CAD Declines on the horizon💷💷GBP/CAD Declines on the horizon. 💷This time it's time for GBP/CAD which, in my opinion, gave us a clear signal today on the direction it wants to go in for the next few days. 💷Just look at today's downtrend candle which stands out from the rest in terms of size. And Everything becomes clear. 💷 As you can see, the price has just fallen to the fibo level of 0.786 of the entire upward wave from the 2010 bottom to the 2015 peak. I don't think it represents strong support looking at the dynamics with which we are moving. 💷 The key support will be the zone defined on the chart based on the cluster of two levels. The first level is the fibo level of the entire upward wave from the 1985 bottom to the 1998 peak and the second level is the 1976 bottom. 💷It will be really interesting to see how the price reacts in this support zone. 💷I determined the resistance zone based on the price levels that have provided resistance to the price in the past. 💷The scenario I am playing out is a continuation of the declines to the support zone where I will watch to see how the price will behave. I am aware of the possibility of a correction at any time, this should be taken into account, If the outlook would change I will publish a post with an update, so I encourage you to actively follow the profile and read the description carefully. 💷 *Please do not suggest the path I have drawn with the lines this is only a hypothetical scenario. 🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
Short
by InvestMate
7
InvestMate|GBP/CAD Time for a correction?💷💷GBP/CAD Time for a correction? 💷Growth in the UK is clearly slowing down the latest economic growth readings for Q3 2022 showed a 0.2% contraction in the economy 💷 In Canada, on the other hand, we await for Q3 data which will be released on 29 November the market is also assuming a contraction of the economy from 0.8% to 0.4% here too 💷 Unemployment in the UK remains low. The latest figures, released on 15 November, put unemployment at 3.6%, up just 0.1% on last reading. 💷In Canada unemployment is 5.2% definitely higher than in the UK, the readings took place on 4 November. Next will be 2 December in which the market is already assuming further increases to levels of 5.4% 💷Inflation in the UK has beaten extremely pessimistic forecasts and at the readings that took place on 16 November we reached a new peak in inflation which is already 11.1%. This does not create the prospect of slowing down with interest rate rises. 💷 In Canada, inflation already peaked in July and has been falling steadily since then. We are currently awaiting the latest data which will be released on 21 November. The market is not assuming anything surprising and still regards the continuation of the downward trend as the basic scenario. Slowing inflation creates room for not-so-rapid interest rate rises in Canada. 💷UK interest rates at the last council meeting which took place on 3 November were raised to 3%, a jump of a full 75 basis points from 2.25% For the time being, there are no signs of slowing interest rate cuts in the UK. 💷 In Canada, interest rates are currently at 3.75 per cent and we will find out on 12 December what the next decision of the monetary policy council will be. Evidently, Canada has fared better than the UK in terms of inflation thanks to previous larger increases. 💷 At the moment Canadian Dollar is more expensive compared to the Pound. But the prospect of further interest rate rises in the UK and a cooling of hawkishness in Canada could bring a strong wave of appreciation of the Pound against the Canadian Dollar over the next few months 💷 Turning to the chart, we can see that the Pound has gained quite a lot against the Canadian Dollar in the last week without any significant corrections. Looking at the situation as a whole, it seems to me that a correction at this point, especially before further increases, would be advisable. 💷💷The best places for a correction for me are two support zones. The first is based on a cluster of fibo levels at 0.236 of the entire upward wave and 0.618 of the current upward wave, which has lasted since 4 November. 💷The second zone is around the 0.786 level of this wave plus the 1:1 level of the biggest downward correction in the whole upward wave since the determination of the new lows. 💷These are the two places I will be paying attention to. 💷Of course, the local resistance zone remains the peak from Friday. 💷The scenario I am playing out is a gradual descent of the price lower and lower taking into account the corrections along the way, then I will look to see what the situation is and to which support level the price will fall. In order to find a future turning point and a continuation of the uptrend 💷*Please do not suggest the path I have drawn with the lines this is only a hypothetical scenario for further increases. 🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
Short
by InvestMate
1
GBPCAD on a retracement 🦐GBPCAD on the 4h chart is trading inside a descending channel. The price after the recent low is trading in a series of higher highs. According to Plancton's strategy IF the price will break above the resistance area i will consider a nice long order. ––––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
by InkyGrip
12
GBP/CAD:SELL From Breakout Dynamic Support for A SHORT SetupGBP/CAD in the last session compress the price inside a bullish channel but yesterday the price Broker the dynamic support of this pattern and seems today ready to drop down, in the direction of the main trend. The scenario looks like a local double top where the divergences on the stochastic can make our Idea stronger. The Alternative scenario will happen if the price rebounds on this dynamic support after a fake breakout and raise until the 1.5700 value.
Short
by FOREXN1
13
Gbpcad,should be on the upside...This pair should be continuing on the up side as mentioned previously if there's no changes on lower timeframe... **Find out more from my Tradingview Stream this week** *************************************************************************************** Hello there! If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏 And if you would like to show further support for me, you can gift me some coins on tradingview! 😁 Thank you! Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared. Thank you, and please do your due diligence before any putting on any trades!
Long
by Shadowing_The_Big_Boys
GBP CAD - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE A looming recession has been a key source of Pound weakness and has kept pressure on Sterling despite ongoing BoE hikes. But there is a new threat in focus. It seems the PM’s new fiscal plan, even though putting downside pressure on inflation and lowering growth risks, has drastically increased debt concerns. The disorderly move in Gilt yields were enough to force the BoE’s to step in with a limited (both in time and size) bond buying intervention plan. This has brought some calm to the angst but being limited won’t be enough to fix the fiscal concerns. It was another volatile week for Sterling as a result of the political uncertainty with the resignation of PM Truss. In the week ahead we only have S&P Global PMIs to watch on the data side, but all focus and attention will be on the leadership race to see which 2 or 3 candidates will meet the minimum 100 nominations to put their names in the hat. POSSIBLE BULLISH SURPRISES With recession the base assumption, any incoming data that surprises meaningfully higher could trigger relief for the GBP. With focus on stagflation, any downside surprises in CPI or factors that decrease inflation pressures are expected to support the GBP and not pressure it. If massive disorderly moves in Gilts forces the BoE to step up as the buyer of last resorts that could trigger GBP upside. If either Johnson or Sunak gets enough nominations that could ease some of the pressure from the Pound. POSSIBLE BEARISH SURPRISES With recession the base assumption, any material downside surprises in growth data can still trigger short-term pressure. With focus on stagflation, any upside surprises in CPI or factors that increase more inflation pressures are expected to weigh on the GBP and not support it. If we have big disorderly moves in Gilts but the BoE reiterates, they won’t intervene again that could put pressure on GBP. Any outcome that increases the likelihood of a general election should increase the risk premium in the GBP. BIGGER PICTURE The fundamentals for Sterling remain bearish . Recession is around the corner (might be in one already), and the new fiscal plan has failed to provide any assurances for investors (even though we think the negative reaction is not completely warranted). Even though flash PMI data will be important to watch as always, the political situation will likely overshadow the econ data as all eyes will be on the leadership race to see who will win the race as the UK’s next PM. CAD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Recent economic data has shown some deterioration for the growth outlook with three consecutive months of contraction in jobs, falling house prices, and a deceleration in both core and headline CPI . The previous jobs data gave the CAD a decent lift with its first jobs gain in four weeks, but at 21K jobs added, the job market is still down 92K jobs in the last four months. However, Governor Macklem gave no intention that the bank is getting close to the end of their hiking cycle. Even though he didn’t specifically say that the market’s expectations for the terminal rate is too low, his concerns about inflation saw STIR markets price in close to 88% probability for another 50bsp this upcoming week. With recent data we think the bank is close to taking a pause, but there is a risk that the bank doubles down this upcoming week and increasing the terminal rate which could provide short-term support for the CAD. POSSIBLE BULLISH SURPRISES Catalysts that see upside in Oil (deteriorating supply outlook, ease in demand fears, OPEC developments) could trigger bullish CAD reactions. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the CAD. After the bank’s frontloading, there is a very high bar to surprise on the hawkish side for the BoC , but if the bank were to say they think STIR market pricing for the terminal rate is too low that can provide upside for the CAD. POSSIBLE BEARISH SURPRISES Catalysts that trigger downside in oil (deteriorating demand outlook, ease in supply shortage, less supply constraints, OPEC developments) could be a negative catalyst for the CAD as well. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the CAD. With the bank 100bsp away from terminal rate expectations, and after recent hawkish comments, it won’t take much to surprise dovish, and any signals or comments from the BoC that they’ll pause hikes should be a negative for the CAD. BIGGER PICTURE The bigger picture outlook for the CAD remains neutral for now. Given the clear risks to the growth outlook (recent negative econ data and fall in oil prices) we remain cautious on the currency. Furthermore, with lots of good news priced, and with the BoC close to terminal rate expectations, our preferred way of trading the CAD is lower on clear short-term negative catalysts. The focus for the CAD will be firmly fixed on the BoC policy decision, to see what the bank has to say about their future path for rates. Whether they talk up the terminal rate or confirm suspicions that they could be nearing a pause.
by thunderpips
3
GBP CAD - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE A looming recession has been a key source of Pound weakness and has kept pressure on Sterling despite ongoing BoE hikes. But there is a new threat in focus. It seems the PM’s new fiscal plan, even though putting downside pressure on inflation and lowering growth risks, has drastically increased debt concerns. The disorderly move in Gilt yields were enough to force the BoE’s to step in with a limited (both in time and size) bond buying intervention plan. This has brought some calm to the angst but being limited won’t be enough to fix the fiscal concerns. It was another volatile week for Sterling as a result of the political uncertainty with the resignation of PM Truss. In the week ahead we only have S&P Global PMIs to watch on the data side, but all focus and attention will be on the leadership race to see which 2 or 3 candidates will meet the minimum 100 nominations to put their names in the hat. POSSIBLE BULLISH SURPRISES With recession the base assumption, any incoming data that surprises meaningfully higher could trigger relief for the GBP. With focus on stagflation, any downside surprises in CPI or factors that decrease inflation pressures are expected to support the GBP and not pressure it. If massive disorderly moves in Gilts forces the BoE to step up as the buyer of last resorts that could trigger GBP upside. If either Johnson or Sunak gets enough nominations that could ease some of the pressure from the Pound. POSSIBLE BEARISH SURPRISES With recession the base assumption, any material downside surprises in growth data can still trigger short-term pressure. With focus on stagflation, any upside surprises in CPI or factors that increase more inflation pressures are expected to weigh on the GBP and not support it. If we have big disorderly moves in Gilts but the BoE reiterates, they won’t intervene again that could put pressure on GBP. Any outcome that increases the likelihood of a general election should increase the risk premium in the GBP. BIGGER PICTURE The fundamentals for Sterling remain bearish . Recession is around the corner (might be in one already), and the new fiscal plan has failed to provide any assurances for investors (even though we think the negative reaction is not completely warranted). Even though flash PMI data will be important to watch as always, the political situation will likely overshadow the econ data as all eyes will be on the leadership race to see who will win the race as the UK’s next PM. CAD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Recent economic data has shown some deterioration for the growth outlook with three consecutive months of contraction in jobs, falling house prices, and a deceleration in both core and headline CPI . The previous jobs data gave the CAD a decent lift with its first jobs gain in four weeks, but at 21K jobs added, the job market is still down 92K jobs in the last four months. However, Governor Macklem gave no intention that the bank is getting close to the end of their hiking cycle. Even though he didn’t specifically say that the market’s expectations for the terminal rate is too low, his concerns about inflation saw STIR markets price in close to 88% probability for another 50bsp this upcoming week. With recent data we think the bank is close to taking a pause, but there is a risk that the bank doubles down this upcoming week and increasing the terminal rate which could provide short-term support for the CAD. POSSIBLE BULLISH SURPRISES Catalysts that see upside in Oil (deteriorating supply outlook, ease in demand fears, OPEC developments) could trigger bullish CAD reactions. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the CAD. After the bank’s frontloading, there is a very high bar to surprise on the hawkish side for the BoC , but if the bank were to say they think STIR market pricing for the terminal rate is too low that can provide upside for the CAD. POSSIBLE BEARISH SURPRISES Catalysts that trigger downside in oil (deteriorating demand outlook, ease in supply shortage, less supply constraints, OPEC developments) could be a negative catalyst for the CAD as well. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the CAD. With the bank 100bsp away from terminal rate expectations, and after recent hawkish comments, it won’t take much to surprise dovish, and any signals or comments from the BoC that they’ll pause hikes should be a negative for the CAD. BIGGER PICTURE The bigger picture outlook for the CAD remains neutral for now. Given the clear risks to the growth outlook (recent negative econ data and fall in oil prices) we remain cautious on the currency. Furthermore, with lots of good news priced, and with the BoC close to terminal rate expectations, our preferred way of trading the CAD is lower on clear short-term negative catalysts. The focus for the CAD will be firmly fixed on the BoC policy decision, to see what the bank has to say about their future path for rates. Whether they talk up the terminal rate or confirm suspicions that they could be nearing a pause.
by thunderpips
10
GBP CAD - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE A looming recession has been a key source of Pound weakness and has kept pressure on Sterling despite ongoing BoE hikes. But there is a new threat in focus. It seems the PM’s new fiscal plan, even though putting downside pressure on inflation and lowering growth risks, has drastically increased debt concerns. The disorderly move in Gilt yields were enough to force the BoE’s to step in with a limited (both in time and size) bond buying intervention plan. This has brought some calm to the angst but being limited won’t be enough to fix the fiscal concerns. It was another volatile week for Sterling as a result of the political uncertainty with the resignation of PM Truss. In the week ahead we only have S&P Global PMIs to watch on the data side, but all focus and attention will be on the leadership race to see which 2 or 3 candidates will meet the minimum 100 nominations to put their names in the hat. POSSIBLE BULLISH SURPRISES With recession the base assumption, any incoming data that surprises meaningfully higher could trigger relief for the GBP. With focus on stagflation, any downside surprises in CPI or factors that decrease inflation pressures are expected to support the GBP and not pressure it. If massive disorderly moves in Gilts forces the BoE to step up as the buyer of last resorts that could trigger GBP upside. If either Johnson or Sunak gets enough nominations that could ease some of the pressure from the Pound. POSSIBLE BEARISH SURPRISES With recession the base assumption, any material downside surprises in growth data can still trigger short-term pressure. With focus on stagflation, any upside surprises in CPI or factors that increase more inflation pressures are expected to weigh on the GBP and not support it. If we have big disorderly moves in Gilts but the BoE reiterates, they won’t intervene again that could put pressure on GBP. Any outcome that increases the likelihood of a general election should increase the risk premium in the GBP. BIGGER PICTURE The fundamentals for Sterling remain bearish . Recession is around the corner (might be in one already), and the new fiscal plan has failed to provide any assurances for investors (even though we think the negative reaction is not completely warranted). Even though flash PMI data will be important to watch as always, the political situation will likely overshadow the econ data as all eyes will be on the leadership race to see who will win the race as the UK’s next PM. CAD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Recent economic data has shown some deterioration for the growth outlook with three consecutive months of contraction in jobs, falling house prices, and a deceleration in both core and headline CPI. The previous jobs data gave the CAD a decent lift with its first jobs gain in four weeks, but at 21K jobs added, the job market is still down 92K jobs in the last four months. However, Governor Macklem gave no intention that the bank is getting close to the end of their hiking cycle. Even though he didn’t specifically say that the market’s expectations for the terminal rate is too low, his concerns about inflation saw STIR markets price in close to 88% probability for another 50bsp this upcoming week. With recent data we think the bank is close to taking a pause, but there is a risk that the bank doubles down this upcoming week and increasing the terminal rate which could provide short-term support for the CAD. POSSIBLE BULLISH SURPRISES Catalysts that see upside in Oil (deteriorating supply outlook, ease in demand fears, OPEC developments) could trigger bullish CAD reactions. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the CAD. After the bank’s frontloading, there is a very high bar to surprise on the hawkish side for the BoC, but if the bank were to say they think STIR market pricing for the terminal rate is too low that can provide upside for the CAD. POSSIBLE BEARISH SURPRISES Catalysts that trigger downside in oil (deteriorating demand outlook, ease in supply shortage, less supply constraints, OPEC developments) could be a negative catalyst for the CAD as well. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the CAD. With the bank 100bsp away from terminal rate expectations, and after recent hawkish comments, it won’t take much to surprise dovish, and any signals or comments from the BoC that they’ll pause hikes should be a negative for the CAD. BIGGER PICTURE The bigger picture outlook for the CAD remains neutral for now. Given the clear risks to the growth outlook (recent negative econ data and fall in oil prices) we remain cautious on the currency. Furthermore, with lots of good news priced, and with the BoC close to terminal rate expectations, our preferred way of trading the CAD is lower on clear short-term negative catalysts. The focus for the CAD will be firmly fixed on the BoC policy decision, to see what the bank has to say about their future path for rates. Whether they talk up the terminal rate or confirm suspicions that they could be nearing a pause.
by thunderpips