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#USDCAD approaching pivot, potential for drop! On the H4, with price moving below the ichimoku cloud , we have a bearish bias that price will drop to 1st support at 1.24161 which is in line with horizontal swing low support and 78.6% Fibonacci retracement from our pivot at 1.25677, which is in line with horizontal swing high resistance and 50% Fibonacci retracement level. Alternatively, price may break pivot structure and head for 1st resistance at 1.26217, which coincides with horizontal swing high resistance, 50% and 78.6% Fibonacci retracement . Pivot: 1.26217 Why we like it: 50.0% Fibonacci retracement level, 88% Fibonacci retracement level 1st Support: 0.70958 horizontal swing low support, 61.8% Fibonacci extension level 1st Resistance: 0.72732 50.0% Fibonacci retracement levelhorizontal swing high resistance Trading FX & CFDs carries high risk.
Short
by VantageMarkets
USD CAD - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Fed turned a lot more hawkish than expected in Dec. They doubled the pace of tapering to $30 billion per month which will see QE concluded by March 2022 as was widely expected. Surprisingly though the Summary of Econ Projections showed the median dot plot pencilled in 3 hikes for 2022 (up from the previous 1), confirming Fed Fund Future expectations. Fed Chair Powell explained they hadn’t decided whether to pause between the end of tapering and a first hike but reiterated that rates will likely only rise when QE has concluded. Another positive shift was Powell’s comments that they could raise rates before full employment has been met due to high inflation , and stated that with inflation above target, they cannot wait too long to get to maximum employment as current inflation levels is seen as a threat to max employment. The hawkish tilt went further to note that the bank started discussing the balance sheet but said no decisions were made on when QT might commence. Even though the dots projected 3 hikes for 2022, the updated rate trajectory only showed 1 additional hike over the forecast horizon, which combined with a lower terminal rate was less hawkish than some had feared. Nonetheless, the meeting marked a material hawkish shift from the Fed, putting it on par with the likes of the RBNZ. The meeting minutes also revealed that the QT discussion saw majority of members thinking it appropriate to start QT soon after rate lift off and another more hawkish tilt than expected from the Fed. 2. Global Risk Outlook The growth & inflation outlook will be key for the USD, not only growth and inflation in the US but also global. The USD is often inversely correlated to global growth & inflation , doing bad during reflationary environments (growth and inflation accelerating), while the USD usually does well in disinflationary environments (growth and inflation decelerating). Thus, with expectations that both growth and inflation will decelerate this year, both in the US and the globe, that should be a positive input for the USD in the med-term . However, it also means there will be a lot of focus on the incoming data to see how it develops and how the Fed responds to it. For example, if the economic outlook worsens materially, the Fed could backtrack on their current aggressive path, which could mean downside for the USD if money markets start pricing out hikes, so incoming data is key. 3. CFTC Analysis Latest CFTC data showed a positioning change of -1186 with a net non-commercial position of +37892. The shortterm unwinding of stretched USD longs played out exactly as expected. Even though the CFTC data does not show a big unwind we need to remember the big downside move in the USD started on Wednesday, which means last week’s COT data will not include any of that, so take this week’s data with a pinch of salt. With the fundamental bias unchanged, the real question is whether the flush we saw this past week is over. 4. The Week Ahead In the week ahead, things will be very quiet on the data front for the US, with US participants also away on Monday for a bank holiday. Thus, a lot of the Dollar’s flow will be dictated by overall risk sentiment, key events for other major currencies, and of course focus on whether the bond and equity market continue to provide mixed signals on the growth and inflation outlook in the midst of the Fed’s current aggressive policy path. With markets pricing in well over 3 hikes for the Fed this year already, there is arguably still a lot of disappointment for money markets on this front if the economic picture starts to rapidly deteriorate. Even though that could add pressure to the USD as positioning gets squared up, keep in mind that a disinflationary environment is also usually USD positive, which means the path in the very short-term for the USD is less clear than we would have hoped it to be. In the week ahead the key technical levels to watch is key support between 94.70 and 94.50. We spoke about the importance of these levels a couple of times this past week and saw a solid bounce from that zone on Friday. A continuation of that bounce arguably opens up a retest of previous key support around 95.60, however if we push lower and take out key support it opens up for a move towards 93. 40 , so we are at a very important juncture right now from a technical and momentum perspective. CAD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the BoC left rates at 0.25% as expected and maintained forward guidance where it expects rates at current levels until the middle quarters of 2022. This disappointed some participants who were looking for the bank to announce that the output gap could be closed in 1Q22. On inflation, even though the bank still thinks it will ease from 2H22, they did drop ‘temporary’ when referring to price pressures, similar to the Fed’s removing the word ‘transitory’. The bank took a slightly bleaker view on growth, pointing to both the new Omicron variant and flooding in British Columbia as possibly drags on growth and something that could elevate supply chain issues. What disappointed markets a bit was that the bank said none of the recent developments warrants any further adjustments to normalization, which disappointed the bulls looking for a possible hawkish tilt. The bank noted that employment is back to pre-covid levels, and economic momentum in Q4 were solid, but the overall tone wasn’t enough to convince markets of a Jan hike at that time, but markets have since then continued to ramp up hike bets with money markets pricing in a >70% chance of a hike at the Jan meeting and pricing in close to 6 hikes for 2022. Keep in mind that the bank was already concerned about growth before the recent Omicron restrictions, which means the likelihood of them brining forward output gap projections seems unlikely and for that reason we think is setting up for a disappointment and possible repricing lower in money market expectations in the upcoming meetings. 2. Intermarket Analysis Considerations Oil’s massive post-covid recovery has been impressive, driven by three drivers: supply & demand (OPEC’s production cuts); improving global economic outlook and improving oil demand outlook, even though slightly pushed back by Delta concerns; higher for longer than expected inflation. Even though Oil has recovered a lot of its recent downside and have proven our caution wrong, we are still cautious going into the first two quarters. The drivers keeping us cautious is expectations of a more hawkish Fed, slowing growth and inflation, lower inflation expectations (due to the Fed) and a possible supply surplus in 1Q22. If our concerns do materialize into downside for oil prices it should put pressure on the CAD. There have however been shortterm drivers supporting Oil prices and has kept the CAD more supported than we would have expected. 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 Latest CFTC data showed a positioning change of +3649 with a net non-commercial position of -7376. Recent price action has seen the CAD take a very similar path compared to April and Oct 2021 where markets were way too aggressive to price in upside for the CAD only to see majority of it unwind. We think the CAD is setting up for a similar disappointment with money markets way too aggressive on rate expectations for 2022. 5. The Week Ahead In the week ahead the main event we’ll be watching for the CAD is Wednesday’s CPI data. The aggressive pivot from the Fed has seen markets pricing in a potential similar pivot for the BoC, but that seems unlikely for a few reasons. Firstly, as noted above the output gap projections are unlike to have changed between now and December, with the higher probability that the bank sounds even more cautious on growth with the recent Omicron restrictions only coming online after their Dec meeting (if growth already was a concern before that, it seems strange that they would suddenly see a brighter outlook after more restrictions were implemented). Secondly, and in connection with this week’s CPI, Canada does not have the same price pressure compared to the US (with US Core CPI sitting at 5.4% and the average of the BoC’s preferred measure of Core CPI sitting at 2.74%. That means CPI will be important this week, because if we see yet another uninspiring print this week, that should see some of the aggressive policy bets unwind and would be a negative input for the CAD. At the same time, even if we see a beat, with almost 6 hikes already priced, what more can the market price in?
by thunderpips
5
USDCAD potential for bounce! | 18th Jan 2022Prices are abiding to our daily ascending trendline support and at a Pivot . We see the potential for a bounce from our buy entry at 1.24885 in line with 78.6% Fibonacci extension towards our Take Profit at 1.25971 which is an area of Fibonacci confluences. RSI is at levels where bounces occurred previously, further supporting our bullish bias. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be
Long
by FXCM
USDCAD potential for bounce! | 18th Jan 2022Prices are abiding to our daily ascending trendline support and at a Pivot. We see the potential for a bounce from our buy entry at 1.24885 in line with 78.6% Fibonacci extension towards our Take Profit at 1.25971 which is an area of Fibonacci confluences. RSI is at levels where bounces occurred previously, further supporting our bullish bias. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be
Long
by Rockqet
USDCADI wanted to take a deeper look into USA and Canada. When looking at techs and fundamentals, there looks like there could be some space here for a run as we go through our interest rate spikes etc throughout this year. On the daily timeframe, I doubled the ATR for my stop loss and the target is near the 60% area which is where the previous high's are on a higher outlook as far as time. Let's see what happens over time. We are currently in a range of higher high's and I would like to see if we are getting the same pattern (look at circles). I'll wait as long as I can for this one. I compared the following statistics to try to get a more fundamental outlook vs depending on straight technical: GDP per Capita Differential (Lesser amount wins) - USA Productivity -USA Unemployment Rate Differential (Higher amount wins) -USA Government Spending (Higher Amount wins) -USA Business Confidence differential (Lesser amount wins) -USA Consumer Confidence differential (Lesser amount wins) - Canada Consumer Spending (Higher amount wins) -Canada What do you think? I'm looking for a more long term outlook here. This will be my only forex trade this year. Might scale in on this position over time if things work out.
Long
by Redimere_91
4
#USDCAD approaching pivot, potential for drop! On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will drop to 1st support at 1.24161 which is in line with horizontal swing low support and 78.6% Fibonacci retracement from our pivot at 1.25677, which is in line with horizontal swing high resistance and 50% Fibonacci retracement level. Alternatively, price may break pivot structure and head for 1st resistance at 1.26217, which coincides with horizontal swing high resistance, 50% and 78.6% Fibonacci retracement. Pivot: 1.26217 Why we like it: 50.0% Fibonacci retracement level, 88% Fibonacci retracement level 1st Support: 0.70958 horizontal swing low support, 61.8% Fibonacci extension level 1st Resistance: 0.72732 50.0% Fibonacci retracement levelhorizontal swing high resistance Trading FX & CFDs carries high risk.
Short
by VantageMarkets
USD/CAD Long Hi Traders, Please see my analysis of USD/CAD where we have formed a wedge pattern. We expect price action to reach the top of the wedge and either rebound breaking down through the wedge or continue up breaking the wedge. "The US Dollar has plummeted more than 2.8% off the monthly highs with a break below confluent support at the monthly open / opening-range lows taking price towards a key support zone today at the 78.6% Fibonacci retracement of the October rally / 100% extension of the December decline at 1.2432/70. Note that the lower parallel of the ascending pitchfork we’ve been tracking off the 2021 lows also converges on this zone and the immediate decline may be vulnerable into this region - we’re looking for possible price inflection down here." - www.dailyfx.com
Long
by Username_for_trading
USDCAD key decision pointsPlease leave a like if you agree 👍 USDCAD has been bouncing between horizontal resistance and an upward trendline support. Most recently we have seen a rejection of the horizontal resistance that is now acting as a strong Supply Zone leading to a strong move down, followed by a small bounce off the upward trendline support. This upward trendline support and the low of last week are going to be the key areas to watch to see if price is going to continue the downward trend that was initiated with the Supply Zone rejection over the Christmas period. A break below these levels would signal a further drop to the next significant level of support. CAD and USD are clearly heading in different directions at the moment, not only against each other but against the basket of major currencies, with average RSI for CAD vs the other 5 majors near 60, and USD near 42. On the bullish side, price tested the upward support trendline twice at the backend of last week and gave us some big wicks on the daily showing the buyers rejection of that area. Monday so far has seen another drop heading back to the trendline, but a reversal here and break above Friday's high would show a clear change in sentiment and create a potential long opportunity. Let me know your thoughts in the comments below!
Short
by HayeTrading
19
USDCAD on a bear flag? 🦐USDCAD on the 4h chart is moving in an ascending channel. The price bounced over the lower dynamic support and according to Plancton's strategy IF the price will break below and satisfy the ACADEMY rules we will set a nice short 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
Short
by InkyGrip
10
USD CAD - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy A lot more hawkish than expected is how the Fed’s Dec decision can be summed up. The Fed doubled the pace of tapering to $30 billion per month which will see the QE program conclude by March 2022 as was widely expected. The big change came from the updated Summary of Econ Projections where the median dot plot pencilled in 3 hikes for the Fed next year (up from just shy of 1 hike projected just 3 months ago), confirming money market and Fed Fund Future expectations. Fed Chair Powell explained they hadn’t decided whether to pause between the end of tapering and a first hike but reiterated that rates will likely only rise when the taper has concluded. Another positive shift was Powell’s comments that the balance of goals means it could possibly raise rates before full employment has been met due to high inflation , and also stated that with inflation above target, they cannot wait too long to get to maximum employment with current levels of inflation described as a threat to full employment. The hawkish tilt even went so far that the bank started to discuss the balance sheet but said they didn't make any decisions on when the balance sheet would shrink. Even though the dots projected 3 hikes for 2022, the updated rate hike trajectory only showed 1 additional hike over the forecast horizon, which combined with a lower terminal rate was less hawkish than some had feared. Nonetheless, with this recent meeting the Fed is now the second most hawkish CB after the RBNZ and should be supportive for the USD in the med-term . This past week’s meeting minutes also revealed that the bank has started discussing QT with majority of members thinking it’s appropriate to start QT soon after rate lift off which was a much more hawkish tilt than expected from the Fed. 2. Real Yields With the hawkish tilt from the Fed, it should see breakeven inflation rates fall faster than US10Y as a more aggressive Fed should see med-term growth & inflation expectations fall. Rising real yields should be good for the USD as well and one to keep on the radar, especially after this weeks divergence. 3. Global Risk Outlook What happens to growth and inflation this year will be key for the USD, not only growth and inflation in the US though but also on a global scale. The USD usually does bad in reflationary environments (where growth and inflation accelerates globally), while the USD usually does very well when growth and inflation decelerates globally). So, expectations that we are seeing a slowdown in both of them globally should be a positive input for the USD in the med-term . However, it also means there will be a lot of focus on the incoming data to see how it develops. 4. CFTC Analysis Latest CFTC data showed a positioning change of +2289 with a net non-commercial position of +39078. With large specs net-longs close to 2019 highs and leverage funds USD longs also looking stretched, and with a lot of the Fed hawkishness arguably priced in, the USD has been looking vulnerable to some unwinding, which is what we saw this past week. Even though the Fed remains on a hawkish path (for now) and the USD remains bullish from a fundamental outlook point of view, with positioning where it is right now, any recovery in risk sentiment or bad economic data in the US relative to the rest of the world could continue to add some pressure on the Greenback in the short-term. However, it will take a lot to change the overall fundamental bullish outlook given what markets are expecting from 2022. CAD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the BoC left rates at 0.25% as expected and maintained forward guidance where it expects rates at current levels until the middle quarters of 2022. Even though the bank still thinks inflation will ease from 2H22, they did drop the term "temporary" when referring to price pressures, similar to the Fed’s drop of the word transitory. The bank took a slightly bleaker view on growth, pointing to both the new Omicron variant and flooding in British Columbia as possibly drags on growth and something that could elevate supply chain issues. What disappointed markets a bit was that the bank said none of the recent developments warrants any further adjustments to normalization, which disappointed the bulls looking for a possible hawkish tilt. The bank noted that employment is back to pre-covid levels, and economic momentum in Q4 were solid, but the overall tone wasn’t enough to convince markets of a 1Q22 hike, with market odds at roughly 50/50 for the Jan meeting. The recent Omicron restrictions is expected to hit growth in the first quarter, which means a hike in quarter 2 is more likely as the bank would arguably not be in too much of a hurry to turn overly aggressive given the divergence between the divergent government response to Omicron between the US and the BoC . Thus, we think the bank holds off with hikes until 2Q22, which means some of those aggressive policy bets (markets pricing in very close to 5 hikes for this year this past week) will arguably need to be pushed back and repriced. 2. Intermarket Analysis Considerations Oil’s massive post-covid recovery has been impressive, driven by three drivers: supply & demand (OPEC’s production cuts); improving global economic outlook and improving oil demand outlook, even though slightly pushed back by Delta concerns; higher for longer than expected inflation . Even though Oil has recovered a lot of its recent downside and have proven our caution wrong, we are still cautious going into the first two quarters. The drivers keeping us cautious on oil right now is expectations of a more hawkish Fed, slowing growth and inflation , and a possible supply surplus in 1Q22. If our concerns do materialize into downside for oil prices it should put pressure on the CAD. Recent supply constraints in Kazakhstan and Libya has aided oil this past week (alongside some higher inflation inputs), and if that continues it could provide continued short-term support for Oil though so worth keeping that in mind. 3. Global Risk Outlook As a high-beta currency, the CAD benefited from the market's improving risk outlook coming out of the pandemic as participants moved out of safe-havens. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets supported by reflation and post-recession recovery best. If expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the CAD in the med-term , but recent short-term jitters are a timely reminder that risk sentiment is also a very important short-term driver. 4. CFTC Analysis Latest CFTC data showed a positioning change of -691 with a net non-commercial position of -11025. A lot of the previous froth priced into the CAD has arguably been reduced. However, given our concerns about Oil as well as the bar for an aggressive policy response from the BoC looking less certain, we do think there is chance of some additional repricing for the CAD going into 2022, which is why we’ve shifted our fundamental outlook to neutral from weak bullish .
by thunderpips
21
USDCAD potential for further downtrend | 12th JanPrice broke out of the ascending trendline and near sell entry price of 1.26170 which is also 23.6% Fibonacci retracement and 61.8% Fibonacci projection . Price can potentially go to the take profit level of 1.24402 which is 78.6% Fibonacci retracement and 78.6% Fibonacci projection . Our bearish bias is supported by the ichimoku cloud indicator. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by FXCM
3
USD/CAD Bearish Continues. USD/CAD got rejected at the 1.2800 psychological level, which also happens to fall below the 200-day SMA on Jan 6, these technical levels kickstart the pair bearish phase. The price fell by almost 200point before hitting another Quasimodo support zone at 1.2630, which creates a ripple in the price and gives a chance for the buyers to push the up to 1.2700 that falls below the 50.0% fib correction zone. A short position is good after another correcting hit the 21 or 50 days SMAs.
Short
by Adefxc