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Loonie

USDCAD 6th JUNE 2022“Loonie” is one of the most liquid pairs in the forex market. This is because this currency pair represents the two largest and most stable economies in the world. The economic environment in Canada is similar to that of the United States. Both countries have a long history as trading partners and both countries have high per capita incomes. The dynamics of oil supply and demand can have a big impact on the movement of the USDCAD currency pair. Generally, when US demand for Canadian oil rises, this increased demand can lead to higher oil prices, and a decline in the USDCAD exchange rate. when US demand for Canadian oil falls, this decline in demand can lead to lower oil prices, and the USDCAD exchange rate to rise. USOIL ANALYSIS
Long
by DNP-FX
2
USDCAD 30th MAY 2022USDCAD possibly will move in the falling wedge area. the price may be higher if it breakout of the resistance area. GDP growth is noteworthy, analysts expect Canada's annualized GDP growth to fall from 6.7 to 5.4 If it actually occurs at 5.4 or lower, then USDCAD will be bullish. Another data to note is the NFP which will be released this Friday. By considering ISM Manufacturing and ADP data. We can predict NFP before NFP is released. From the two data can be considered using the formula: (80% ISMM + 55% ADP) / 2 = Positive NFP Prediction with ISMM & ADP input : if data is positive = 100, if data is neutral = 50, if data is negative = 0 Here USDCAD Daily chart :
by DNP-FX
USDCAD: A Pullback Trading Setup-INTRODUCTION- USDCAD is currently moving within a wide ascending channel. The price has recently reached a new high at the 1.3070 level. After reaching a new high, the price retraced, and now aims to retest the 1.2750 support level. This is a healthy pullback, as we can see from the past price action that after price has reached a new high, it tends to correct for a period of time but eventually will return to retest the recent high. Therefore, a deep pullback means a great risk to reward ratio trade can be entered to target the recent high. -TRADING PLAN- The price is currently approaching the 1.2750 support level. Our area of interest to enter buy positions is in between the 1.2650 ~ 1.2750 level. From this area, we expect the price to consolidate and form a kind of a pattern, and then rise to retest the previous high at the 1.3070 level. This could potentially be a good 300 ~ 400 pips swing buy trade. We will update with a new post when a swing buy opportunity is created. Check out our ongoing and previous pullback strategies below :)
Long
by NicoBeau_Capital
USDCAD: Greenback Ready To Head Higher Towards 1.33500 USDCAD broke the major resistance on the weekly & monthly timeframe signaling that it is ready to head higher towards the next high present at 1.33500. With the DXY also likely to head higher, this particular pair has been quite resilient in heading higher due to the Lonnie being supported by higher OIL prices. However a slow move upwards is supported by the fundamental factors which are in the favor of the USD. Therefore this pair might keep climbing steadily until it meets its next resistance at 1.33500. This is just my opinion on this pair and its current outlook. the trade criteria are all met and shown on the main chart. Trade carefully using ideal risk to reward ratio. Anyways shall the price retrace to the desired support, i shall make a new post on the trade details. cheers
Long
by FX618Analysis
EURCAD Trade IdeaA 'sell' opportunity just presented itself on the euro-loonie trading chart following the bearish inverted pin bar at the end of the bullish run just below the 1.37664 daily horizontal resistance level. If you enter this trade at 1.37482 and put your stop at 1.37787 (about 30.5 pips) and target at 1.35355 (about 212.7 pips), you could be looking at a reward-to-risk ratio of 6.97. Please cross check with your setup before placing any trade. Your FX Plug, Charles
Short
by charles-okoukoni
4
DXY/USDCAD/EURUSD - REVERSAL EXPECTED?DXY - Dollar Index has approached to its 5 year high of 103 - 104 with strong monthly candle. USDCAD - is approaching to the 2021 resistance level which it breaks during Covid-19 period. EURUSD - has been testing 2015/16 lows after breaking Covid-19 lows. Both the pairs are heavily dependent Dollar Index which remains in limelight after FED Interest rates expectations. What should we expect from here? Since all three are at important levels which can be the reversal points or continuation of the main trend. We have been waiting for DXY to make a move first. If we have closing above resistance with FED rate hike in May'22 the trend will continue. Let us know what do you think in comment sections.
TVC:DXY
by JustTradeSignals
3
Soaring OIL Prices Could Make CADJPY HIT 100.000!Soaring OIL prices has caused the LOONIE to strengthen considerably! On the other hand the JPY has lost ground against all the major currencies. The depreciation in the YEN is driven by the inflation fear in world's major economies caused by the conflict in eastern Europe and soaring OIL prices is not lending a helping hand to the JPY. With OIL prices predicted to keep soaring further this year, we can expect this pair to keep climbing steadily. Now coming to the technical analysis part, we have a clear long term uptrend trend supported by the two weekly trendlines. For this trend to continue, we require a technical confirmation, in this case the monthly candle needs to close above 95.000 psychological resistance. After this we have to wait for the price to retrace to 95.000 psychological support before executing a LONG trade. Patience is everything in this trade, as the retrace would help us attain 1:1 RISK TO REWARD RATIO. A stop loss can be place just beneath the rising trendline just below 90.000 level. Take profit set at 100.000 psychological resistance. Both the technical and fundamentals favor CAD appreciation In A Long run. So lets see what happens. Cheers, I hope you find this insight helpful. Please LIKE & FOLLOW for more insights into Major & Minor currency pairs.
Long
by FX618Analysis
USDCAD 24th MARCH 2022Oil price rally makes positive sentiment for Canadian Dollar, If we look at the COT Reports sentiment: CAD, www.cftc.gov non-commercials began to reduce their short positions by 11,180 contracts, overall long positions were much more by 47,406. this will lead to a strengthening sentiment in the CAD. Technically, we can see an ascending triangle pattern on USDCAD Daily. and a breakout occurred in the support area. this will increase the probability of USDCAD to be bearish in the future. false breakout can happen due to fundamental factors that change every day, the main focus at this time for the USDCAD pair are oil prices, inflation, monetary and fiscal policies.
Short
by DNP-FX
2
USDCAD Likely To HIT 1.25000 As Oil Prices Support The LOONIE!The long term ascending trendline has been violated which is evident to a smaller extent on the main daily chart. Have a look at the image below which show the weekly timeframe perspective of trendline violation: These two perspective strongly favor that indeed the trendline has been violated and now the price looks set to head lower and test 1.25000 psychological support. This is all based on summarized technical terms, on fundamental basis the only supporting hand that could be aided to the Lonnie appreciation against the greenback is the rising commodity prices including OIL. The current market environment seems to be in support for most commodity currencies. So based on this we can expect the CAD to strengthen in the short term. All the entry, target and exit point prices are shown clearly on the main chart. The entry is set at such level so that a 1:1 risk to reward ratio can be achieved! So its best to wait for the price to retrace to ideal entry point so as to even the risk out. Cheers, I hope you find this insight helpful. Please LIKE & FOLLOW for more insights into other major currency pairs.
Short
by FX618Analysis
USD CAD - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Jan FOMC decision was hawkish on multiple fronts. The statement signalled a March hike as expected, but Chair Powell portrayed a very hawkish tone. Even though Powell said they can’t predict the rate path with certainty, he stressed the economy is in much better shape compared to the 2015 cycle and that will have implications for the pace of hikes (more and faster). Furthermore, he explained that there is ‘quite a bit of room’ to raise rates without damaging employment, which suggests upside risks to the rate path. A big question going into the meeting was how concerned the Fed was about recent equity market volatility . But the Chair explained that markets and financial conditions are reflecting policy changes in advance and that in aggregate the measures they look at isn’t showing red lights. Thus, any ‘Fed Put’ is much further away and inflation is the Fed’s biggest concern right now. The Chair also didn’t rule out the possibility of a 50bsp hike in March or possibly hiking at every meeting this year, which was hawkish as it means the Fed wants optionality to move more aggressive if they need to. We didn’t get new info on the balance sheet and Powell reiterated that they’re contemplating a start of QT after hiking has begun and they’ll discuss this in coming meetings. Overall, the tone and language were a lot more hawkish than the Dec meeting and more hawkish than consensus was expecting. 2. Global & Domestic Economy As the reserve currency, the USD’s global usage means it’s usually inversely correlated to the global economy and global trade. The USD usually appreciates when growth & inflation slow (disinflation) and depreciates when growth & inflation accelerates (reflation). Thus, current expectations of a cyclical slowdown (and possible stagflation) are good for the Dollar. Incoming data will be watched in relation to the ‘Fed Put’ as there are many similarities between now and 4Q18, where the Fed were also tightening into a slowdown. If growth data slows and the Fed stays hawkish it’s a positive for the USD, once the Fed pivots dovish that’ll be a negative for the USD. 3. CFTC Analysis The USD remains a net-long across major participants, but with price action looking stretched and with peak hawkishness for the Fed arguably close with >6 hikes priced, the risk to reward of chasing USD strength is not very attractive right now. Continued stagflation and geopolitical risks it mean that stretched positioning might not be as important as usual. JP Morgan also shared some stats that suggest the USD has a historical tendency to strengthen in the 6 months going into a first hike but then to weaken during the 6 months directly after a first hike. This is an interesting phenomenon which is worth keeping in mind given the USD’s recent performance. CAD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy The BoC did not surprise at their March meeting by hiking rates to 0.50% from 0.25% and continuing the reinvestment phase regarding asset purchases. The bank noted that the Russia/Ukraine war was a new major uncertainty for the economy and that as a result inflation is now expected to be higher in the near-term. They were optimistic about the growth outlook though and reiterated that it expects further interest rate rises will be needed. On the QT side, Gov Macklem noted that around 40% of the bank's bond holdings were due to mature within two years, and suggested that balance sheet could shrink quickly, and also added that they will discuss ending the reinvestment phase and starting QT at the April meeting. The Governor also said he didn’t rule out the potential for 50bsp rate rises as oil is putting upside pressure on oil, noting that oil prices around $110 per barrel could add another percentage point to inflation. With markets implying close to another 5 hikes this year, we remain cautious on the currency as a slowing US and Canadian economy means the bank should struggle to maintain it’s current hawkish path in the weeks and months ahead. 2. Intermarket Analysis Considerations Oil’s massive post-covid recovery has been impressive, driven by various factors such as supply & demand (OPEC’s production cuts), strong global demand recovery, and of course ‘higher for longer’ than expected inflation. The geopolitical crisis the world is facing right now have opened up a big push higher in WTI, trading at levels last seen since 2008 last week. With oil prices at these levels the risk to demand destruction and stagflation is higher than ever and means we remain cautious oil in the med-term. Reason for that view is: Synchronised policy tightening from DM central banks targeting demand, slowing growth and inflation, a consensus that is very long oil (growing calls for $100 WTI), very steep backwardation futures curve which usually sees negative forward returns, heightened implied volatility. However, recent geopolitical risks have been a key focus point for oil and means escalation and de-escalation will be important to watch. 3. Global Risk Outlook As a high-beta currency, the CAD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the CAD. 4. CFTC Analysis We think the recent price action and positioning data has seen the CAD take a very similar path compared to April and Oct 2021 where markets were way too aggressive and optimistic to price in upside for the CAD, only to then see majority of it unwind. However, oil prices remain in focus as a key intermarket driver.
by thunderpips
2
USD CAD - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Jan FOMC decision was hawkish on multiple fronts. The statement signalled a March hike as expected, but Chair Powell portrayed a very hawkish tone. Even though Powell said they can’t predict the rate path with certainty, he stressed the economy is in much better shape compared to the 2015 cycle and that will have implications for the pace of hikes (more and faster). Furthermore, he explained that there is ‘quite a bit of room’ to raise rates without damaging employment, which suggests upside risks to the rate path. A big question going into the meeting was how concerned the Fed was about recent equity market volatility. But the Chair explained that markets and financial conditions are reflecting policy changes in advance and that in aggregate the measures they look at isn’t showing red lights. Thus, any ‘Fed Put’ is much further away and inflation is the Fed’s biggest concern right now. The Chair also didn’t rule out the possibility of a 50bsp hike in March or possibly hiking at every meeting this year, which was hawkish as it means the Fed wants optionality to move more aggressive if they need to. We didn’t get new info on the balance sheet and Powell reiterated that they’re contemplating a start of QT after hiking has begun and they’ll discuss this in coming meetings. Overall, the tone and language were a lot more hawkish than the Dec meeting and more hawkish than consensus was expecting. 2. Global & Domestic Economy As the reserve currency, the USD’s global usage means it’s usually inversely correlated to the global economy and global trade. The USD usually appreciates when growth & inflation slow (disinflation) and depreciates when growth & inflation accelerates (reflation). Thus, current expectations of a cyclical slowdown (and possible stagflation) are good for the Dollar. Incoming data will be watched in relation to the ‘Fed Put’ as there are many similarities between now and 4Q18, where the Fed were also tightening into a slowdown. If growth data slows and the Fed stays hawkish it’s a positive for the USD, once the Fed pivots dovish that’ll be a negative for the USD. 3. CFTC Analysis The USD remains a net-long across major participants, but with price action looking stretched and with peak hawkishness for the Fed arguably close with >6 hikes priced, the risk to reward of chasing USD strength is not very attractive right now. Continued stagflation and geopolitical risks it mean that stretched positioning might not be as important as usual. JP Morgan also shared some stats that suggest the USD has a historical tendency to strengthen in the 6 months going into a first hike but then to weaken during the 6 months directly after a first hike. This is an interesting phenomenon which is worth keeping in mind given the USD’s recent performance. 4. The Week Ahead The week ahead for the USD will be dominated by ongoing geopolitical tensions as well as the incoming FOMC meeting. On the geopolitical front, escalation and de-escalation will affect safe haven flows which means it will remain an important driver for the USD, especially with rising commodity prices also stoking growing fears of stagflation. On the FOMC side, a 25bsp hike is fully priced, but markets still have a lot to think about as the March meeting will be accompanied by an updated Summary of Economic Projections, where the markets want to see how the dots have changed (previous meeting showed 3 hikes for 2022). STIR markets currently priced in close to 7 hikes, so anything below 5 ought to be seen as dovish. During his recent testimony, Powell said that markets have responded to their guidance with good transmission and have priced in a much higher tightening path, so if their tone and comments alone have done so much heavy lifting there isn’t much reason for them to suddenly ease off on that. It’s true that the Ukraine/Russia war does add uncertainty, but with the US economy and financial sector far less exposed to Russia compared to Europe, the biggest ‘risk’ from the geopolitical situation is higher commodity prices that feeds into higher inflation expectations. Thus, even though the war adds uncertainty (and the Fed is likely going to say that it does) there is very little reason for them to ease off right now, especially with political pressures building going into the mid-terms. But won’t the Fed be concerned with asset markets by coming across even more hawkish? Despite growth concerns, a war in Europe, global sanctions, additional commodity supply shocks and expectations for 6 Fed hikes and QT, if the S&P is down less than 14% with all of that going on it means that any ‘Fed put’ is probably much further away and no need for the bank to change their tone just yet. How far a hawkish Fed can push long-end yields and the USD is up for debate though. CAD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy The BoC did not surprise at their March meeting by hiking rates to 0.50% from 0.25% and continuing the reinvestment phase regarding asset purchases. The bank noted that the Russia/Ukraine war was a new major uncertainty for the economy and that as a result inflation is now expected to be higher in the near-term. They were optimistic about the growth outlook though and reiterated that it expects further interest rate rises will be needed. On the QT side, Gov Macklem noted that around 40% of the bank's bond holdings were due to mature within two years, and suggested that balance sheet could shrink quickly, and also added that they will discuss ending the reinvestment phase and starting QT at the April meeting. The Governor also said he didn’t rule out the potential for 50bsp rate rises as oil is putting upside pressure on oil, noting that oil prices around $110 per barrel could add another percentage point to inflation. With markets implying close to another 5 hikes this year, we remain cautious on the currency as a slowing US and Canadian economy means the bank should struggle to maintain it’s current hawkish path in the weeks and months ahead. 2. Intermarket Analysis Considerations Oil’s massive post-covid recovery has been impressive, driven by various factors such as supply & demand (OPEC’s production cuts), strong global demand recovery, and of course ‘higher for longer’ than expected inflation. The geopolitical crisis the world is facing right now have opened up a big push higher in WTI, trading at levels last seen since 2008 last week. With oil prices at these levels the risk to demand destruction and stagflation is higher than ever and means we remain cautious oil in the med-term. Reason for that view is: Synchronised policy tightening from DM central banks targeting demand, slowing growth and inflation, a consensus that is very long oil (growing calls for $100 WTI), very steep backwardation futures curve which usually sees negative forward returns, heightened implied volatility. However, recent geopolitical risks have been a key focus point for oil and means escalation and de-escalation will be important to watch. 3. Global Risk Outlook As a high-beta currency, the CAD usually benefits from overall positive risk sentiment as well as environments that benefit pro-cyclical assets. Thus, both short-term (immediate) and med-term (underlying) risk sentiment will always be a key consideration for the CAD. 4. CFTC Analysis We think the recent price action and positioning data has seen the CAD take a very similar path compared to April and Oct 2021 where markets were way too aggressive and optimistic to price in upside for the CAD, only to then see majority of it unwind. However, oil prices remain in focus as a key intermarket driver. 5. The Week Ahead Markets might once more be getting too bullish on the CAD at the wrong time. The CAD, which has not really been benefiting from the big rise in energy prices, saw quite a jolt higher on Friday after the recent jobs report. At face value it was a good print, but under the hood it there was some negatives. Firstly, even though the headline printed above max expectations, the bulk of the gains were part-time jobs. Furthermore, if we account for last month’s contraction, full-time employment only grew by 40K. This week the calendar has CPI data, where another surprise upside print is expected by some to see an even more hawkish BoC. However, with over 6 hikes once again embedded and priced in STIR markets, and with WTI prices started to show some signs of a slowdown in bullish momentum, the odds are arguably tilted towards a more dovish as opposed to more hawkish BoC in the months ahead. However, the short-term could see further strength in the case of a beat, but we will use any additional upside in the CAD to look for selling opportunities.
by thunderpips
2
USD/CAD potential bullish action...After monitoring the USD over the past few days we can see a final clear direction for many instruments as they pave the way to show the trends heading into this first quarterly year end. USD/CAD here is look relatively strong overall with 1.3100 being a clear target to the upside over the coming weeks. As it stands on the daily and above the price action is showing strength around the moving averages and there is a strong Fibonacci setup on the monthly with 1.3100 being an extension confluence. We will update this pair next week to see how it has performed.
Long
by FTUKcom
Shooting Star on USDCAD weekly 8 Feb - 5 Mar 2022Alright, apparently USD is losing grounds against CAD. Breaking 1.2689, which it shall probably will, open way to 1.2600 and 1.2500. Huge shooting star (inverted hammer) on weekly timeframe, with marketing stabilizing itself from the sudden spike on oil last week. Chances are, we might actually see Loonie Dollar struggling between 1.2600 and 1.2700 for the upcoming week. Keep in mind the entire picture and levels on the chart, avoid long positions, happy trading and Best of luck.
Short
by Uzi-Trades-Forex