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USD/CAD – Week 17 – BOC driving the pair to a new low.Last week, the BOC kept the interest rates unchanged and announced that “weekly net purchases of Government of Canada bonds will be adjusted to a target of $3 billion.” This statement dropped the value of the pair from the $1.265 resistance area straight into the support level. In the coming days. we anticipate the price to make a small correction, break the support area and make a new low. Trade with care. Best regards, Financial Flagship Disclaimer: The analysis provided is purely informative and it should not be used as financial advice. Remember that you need a plan before you start trading; so, take this knowledge and use it as a guidebook that will ultimately help you understand the market and easily predict your next move.
Short
by financialflagship
12
1.2500 is still proving to be a sticking point...1.2500 is still proving to be a sticking point for the Loonie vs its US peer, but Usd/Cad has pulled back from circa 1.2535 against the backdrop of firmer crude prices and the Canadian budget that was mixed in terms of 2020/21 and 2021/22 fy deficit forecasts vs prior projections, though pretty neutral on balance, awaiting CPI and the BoC on Wednesday. I have illustrated the make or break zone which will be the main factor to determine the overall mid trend of the next 4 - 5 weeks.
by FTUKcom
8
USD/CAD – Week 15 – Preparing to test the resistance level.Last week, USD/CAD continued to consolidate underneath the upper channel line and at the moment it looks like it may prepare another impulse that could test the resistance level. There is a possibility that the price could drop even more into a deep correction that can reach the support area before starting our expected bullish move. Trade with care. Best regards, Financial Flagship Disclaimer: The analysis provided is purely informative and it should not be used as financial advice. Remember that you need a plan before you start trading; so, take this knowledge and use it as a guidebook that will ultimately help you understand the market and easily predict your next move.
Long
by financialflagship
12
CAD - FUNDAMENTAL DRIVERS1. The Monetary Policy outlook for the BOC: For the past few months, the BOC has been one of the least dovish central banks among the majors. After recent data surprised meaningfully to the upside, market participants have been speculating that the bank will look to taper as soon as the H1 2021. This view was confirmed when the bank announced a discontinuation of their market functioning purchase programs in March. After the most recent batch of econ data (especially jobs data), the market is expecting the bank to announce a reduction in QE purchases as the April meeting. 2. Commodity-linked currency with dependency on Oil exports: Oil staged an unprecedented recovery after hitting rock bottom in 2020. The move higher has been partly driven by (1) supply & demand (OPEC’s production cuts); (2) improving global economic outlook (vaccine roll out and monetary and fiscal stimulus induced recoveries); (3) rising inflation expectations (reflation). Even though further gains will be an uphill battle after the push higher, the bias remains positive in the med-term as long as the supportive factors and drivers remains intact and should be supportive for the CAD in the med-term. 3. Developments surrounding the global risk outlook. As a high-beta currency, CAD has benefited from the market's improving risk outlook over recent months as participants moved out of safe-havens and into riskier, higher-yielding assets. Also, as a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets after moving into an early post-recession recovery phase with expectations of global synchronized recovery. Even though the risks remain surrounding the virus and thus global economic outlook, the success of the global vaccination roll out should prove supportive for the CAD.
by thunderpips
3
USD CAD (Dollar Loonie) Here on the loonie we have a potiental shark pattern or 5-0 pattern setting up. it is either a bullish 5-0 pattern or bearish shark pattern. We are hoping to see price hit the horizontal yellow line and move down; however, there is a major resistance level just a few pips above the pattern. So, i expect to see PA move a bit into the resistance area and get rejected. i will want to see some type of confluence on the oscillators too, along with some structural pattern. Sorry for not going into it any deeper I am behind on some school work and I am also getting back into the 4H time frame trading gonna slowly get down to the 1H again. I am also in the process in making a few courses as well that covers harmonic trading along with a myriad of other topics. When the courses go live i will upgrade my TradingView package to Premium and advertise them on my TradingView.
Short
by ARegularGuy
CAD - CENTRAL BANK ANALYSISObjective: The Bank of Canada Act 1985, requires the BoC's to regulate credit and currency, control and protect the external value of the national monetary unit and to mitigate fluctuations in the general level of production, trade, prices and employment within the scope of monetary action. Since 1991, upon the adoption of inflation targeting, the BoC has also been required to keep inflation within a range of 1-3%. As of February's report, inflation in Canada stands at 1.1% (1.0% prior) while the BoC's core measure slowed to 1.2% from a prior of 1.6%. Canada's other core measures - Median, Trim, Common - printed at 2.0%, 1.9% and 1.3% respectively. Situation: At their March meeting, the BoC left monetary policy unchanged with the Overnight Rate remaining at its record low 0.25%. The BoC refrained from commenting on potential tapering, but stated that they continue to gain confidence in the strength of the recovery and the pace of purchases of government bonds will be adjusted as required. The BoC stated they will continue to provide the appropriate degree of stimulus to support the economic recovery and achieve its inflation objective, stressing there is still considerable economic slack and uncertainty.
by thunderpips
3
CAD - WEAK BULLISHFrom its historic low of -$40.30 on April 20th 2020, WTI saw an unprecedented recovery in the months that followed. Although this recovery became more hard-fought once WTI breached $40 per barrel, gains continued throughout the rest of 2020, breaking above $50 per barrel in the first week of 2021 and a new yearly high of $67.94 on March 8th. Further gains for the commodity are likely to remain an uphill battle; however, with the roll-out of coronavirus vaccines, the bias for WTI should remain to the upside as the vaccine rollout should prove to be a positive factor for the global economic outlook and, hence, the outlook for oil prices. As a commodity-linked currency and Canada's dependence on its oil exports, we expect CAD's fundamental outlook to remain closely tied to the global economic outlook and oil prices. With both of these factors seeing a cautiously positive outlook, CAD holds a weak bullish fundamental bias.
by thunderpips
5
CAD: Current Sentiment DriversLatest Developments: March 17 – Canadian CPI for February increased to 1.1% Y/Y, versus a prior of 1.0%. CPI printed at 0.5%% M/M versus a prior of 0.6%. Regarding the BoC’s core measures, Common CPI remained at 1.3% while Trimmed Mean increased to 1.9% and Median CPI slowed to 2.0%. March 10 – At their March meeting, the BoC kept policy unchanged as expected; and failed to mention possible tapering in April. However, the BoC did note that bond purchases would be adjusted as necessary, and they would continue to provide appropriate stimulus to support the economy and achieve the inflation objective. March 2 – Canadian GDP for Q4 printed at 2.3% Q/Q and 9.6% Q/Q Annualised. The overall encouraging report resulted in an increase in speculation that the BoC could reduce its pace of bond purchases soon than previously expected. February 5 – Canada’s employment report for January saw the Unemployment Rate increase to 9.4% (prior, 8.6%) with Employment Change printing at -212.8K (prior, 62.6K). Future Sentiment Shifts: With oil prices steadily climbing, the outlook for CAD remains stable; however, with that said, the coronavirus remains a significant risk to economies and, hence, to the outlook for oil. Additionally, with oil prices now trading around “fair value” levels, further gains for the commodity will be hard fought. Of course, the market’s risk tone, in general, will also remain influential and key to CAD’s outlook given its high beta status. The clearest bias for CAD will result when both oil prices and the risk outlook support one another, i.e. a positive or improving risk outlook and strength in oil prices. However, if these two factors contrast with one another, expect CAD price action to be choppy as the market’s focus shifts between development in oil markets and developments surrounding the coronavirus. Primary Drivers: Bank of Canada – Canada’s monetary policy outlook remains key to CAD’s fundamental outlook. Expectations for policy tightening will likely support CAD, while expectations for policy easing will likely pressure CAD. Oil prices – Oil is Canada’s largest export, accounting for over 17% of Canada’s exports. As such, CAD is highly correlated with oil prices; strengthening when oil prices rally and weakening when oil prices fall. Risk tone – Due to its high beta status, CAD is strongly correlated with the overall risk tone; strengthening in risk on environments and weakening in risk off environments. Global economy – Canada is a relatively open economy. As the world’s 12 largest export economy and with exports accounting for 34% of GDP, Canada’s economic performance and outlook is closely tied to the global economy and the global economic outlook.
by thunderpips
4
CAD - WEAK BULLISHFrom its historic low of -$40.30 on April 20th 2020, WTI saw an unprecedented recovery in the months that followed. Although this recovery became more hard-fought once WTI breached $40 per barrel, gains continued throughout the rest of 2020, breaking above $50 per barrel in the first week of 2021 and a new yearly high of $67.94 on March 8th. Further gains for the commodity are likely to remain an uphill battle; however, with the roll-out of coronavirus vaccines, the bias for WTI should remain to the upside as the vaccine rollout should prove to be a positive factor for the global economic outlook and, hence, the outlook for oil prices. As a commodity-linked currency and Canada's dependence on its oil exports, we expect CAD's fundamental outlook to remain closely tied to the global economic outlook and oil prices. With both of these factors seeing a cautiously positive outlook, CAD holds a weak bullish fundamental bias.
by thunderpips
2
Bearish Trend The loonie is inside a bearish strong trend, we can clearly see it in bigger timeframes such as weekly and daily, now let s analyze the h4 chart: the price is capped by the 200 sma and is in the Supply zone (the orange rectangle), this zone is really strong because we see that it worked perfectly several times, in addition the stochastic has created the so-called Hidden divergence that shoudl push down the price, I will keep a bearish view until the bearish trendline and the moving average will not be broken and I expect the pair to go don to make new lows. Fundamentally we can notice that in last months oil prices went up and they are highly correlated with the value of the Canadian dollar wich is one of the main exporters, in addition yesterday Deputy governor Toni Gravelle highlighted that the reduction of monthly asset purchases is coming, and traders are now speculating that it could as early as April 2021. Gravelle stipulated that the process would be slow with gradual reductions in purchases in provincial debt, corporate debt and the main government bond programs. This tapering is likely to appreciate the value of the CAD, besides the Federal reserve will keep on suppporting the economy and the dollar will be under pressure again due to the fact that in the second part of the year the Inflation will not grow as high as expected previusly.
Short
by Dragon_Investments