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CAD CHF - FUNDAMENTAL DRIVERSCAD FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BoC At their September meeting the BoC delivered on market expectations by not providing any new information. The bank acknowledged the recent hit to growth has been bigger than expected, but also explained that they deem the hit to be temporary and still expect solid growth this year. They also reiterated that even though inflation is currently high and expected to climb, they deem current price pressures as being mostly transitory. The meeting did nothing to change the market’s expectations that the bank will go ahead to announce another round of tapering of C$1 billion at their October meeting, especially after the recent jobs report painted a picture of a growing and recovering labour market, albeit at a slightly slower pace compared to June and July. 2. Commodity-linked currency with dependency on Oil exports Oil staged a massive recovery after hitting rock bottom in 2020. The move higher over the past few months has been driven by supply & demand (OPEC’s production cuts); improving global economic outlook and improving oil demand outlook, even though slightly pushed back by Delta concerns (vaccines and monetary and fiscal stimulus induced recoveries); rising inflation expectations. Even though further gains for Oil will arguably prove to be an uphill battle from here, the bias remains positive in the med-term as long as current supportive factors and drivers remains intact. We will of course have short-term ebbs and flows as we’ve seen in recent weeks which could affect the CAD from an intermarket point of view, but as long as the med-term view for Oil remains higher that should be supportive for Petro-currencies like the CAD. 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 safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. 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 the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 4. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of -3273 with a net non-commercial position of -9283. After some substantial unwinding of oversubscribed net-long positioning over the past couple of months, we’ve now seen CAD positioning move into netshort territory, and since the med-term bias is still bullish it means there is room left to run to the upside in line with the overall bullish fundamentals. Even though market expectations for Oct tapering is intact, markets have been reluctant to trade the CAD back in line with its fundamental bias. The USDCAD as a good example have of course seen large swings in the past two months, but despite them the pair remains largely unchanged from where we were trading two months ago. Patience might be required with this one until we get more clarity from incoming US data as well as expected tapering actions from the Fed. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone has improving considerably from just a year ago because of the global vaccine roll out and the unprecedented amount of monetary policy accommodation and fiscal support from governments. The Delta variant and subsequent impact on growth expectations is of course a sobering reminder that risks remain. Thus, there is still a degree of uncertainty and risks to the overall risk outlook remains which could prove supportive for the safe havens like the CHF should negative factors for the global economy develop. However, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish in the med-term . 2. Idiosyncratic drivers for the CHF Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests. Recent research from the team has revealed an interesting correlation between the CHF simultaneous price moves in Gold and the USD which could explain some of the recent price action. We also need to be careful of the possibility of SNB FX intervention. Apart from that, ING investment bank has recently argued that recent CHF strength could be due to the lower inflation in Switzerland compared to the EU which meant that the real trade-weighted CHF has been trading too cheap. They also expanded that the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful FX intervention lately. The bottom line is that there are often plenty of idiosyncratic drivers which might or might not impact the CHF and makes short-term price fluctuations a mixed bag for the most part. 3. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of -6098 with a net non-commercial position of -5878. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF has now moved back into net-short territory as one would expect from a currency with an overall med-term bearish outlook. Even though we expect the currency to continue weakening in the med-term , any drastic escalation in risk off tones could continue to provide support for the safe-haven currency in the short-term.
by thunderpips
2
CADCHF ready for the break 🦐 CADCHF on the daily chart is consolidating below a weekly resistance. The price tested with a retracement move the 0.5 Fibonacci level and According to Plancton's strategy if the price will break above we will set 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.
Long
by InkyGrip
CAD CHF - FUNDAMENTAL DRIVERSCAD FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BoC At their September meeting the BoC delivered on market expectations by not providing any new information. The bank acknowledged the recent hit to growth has been bigger than expected, but also explained that they deem the hit to be temporary and still expect solid growth this year. They also reiterated that even though inflation is currently high and expected to climb, they deem current price pressures as being mostly transitory. Right now the meeting did nothing to change the market’s expectations that the bank will go ahead to announce another tapering of C$1 billion at their October meeting, especially after this past week’s jobs report painting a picture of a growing and recovering labour market, albeit at a slightly slower pace compared to the June and July. 2. Commodity-linked currency with dependency on Oil exports Oil staged a massive recovery after hitting rock bottom in 2020. The move higher over the past few months has been driven by supply & demand (OPEC’s production cuts); improving global economic outlook and improving oil demand outlook (vaccines and monetary and fiscal stimulus induced recoveries); rising inflation expectations. Even though further gains for Oil will arguably prove to be an uphill battle from here, the bias remains positive in the med-term as long as the current supportive factors and drivers remains intact. We will of course have short-term ebbs and flows as we’ve seen in recent weeks which could affect the CAD from an intermarket point of view, but as long as the med-term view for Oil remains higher that should be supportive for Petro-currencies like the CAD. 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 safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as 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 the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 4. CFTC Analysis Latest CFTC data for the CAD (updated until 7 Sep) showed a positioning change of -3162 with a net non-commercial position of -6010. After some substantial unwinding of oversubscribed net-long positioning over the past couple of months, we’ve now seen CAD positioning move into net-short territory, and since the bias is still bullish in the med-term that means there is a lot of room left to run to the upside in line with the overall bullish fundamentals. As the market’s view on tapering expectations for October is in tact we might see CAD trade more sensitive to overall risk sentiment and Oil price action compared to the monetary policy outlook. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish. 2. SNB Intervention Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and suggests that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful intervention lately. However, as intervention is always the possibility it’s a risk to always keep in mind when trading the CHF. 3. CFTC Analysis Latest CFTC data for the CHF (updated until 7 Sep) showed a positioning change of -3755 with a net non-commercial position of +220. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF still the third largest net-long positioning among the majors, which is at odds with the current fundamental bearish outlook for the currency. Even though we expect the currency to weaken in the med-term, any drastic escalation in risk off tones could still continue to provide support for the safe-haven currency.
by thunderpips
1
CADCHF potential short term bullish momentum | 10th Sep 2021Price is seen to be holding below descending trendline resistance, however we are expecting a short term bullish burst to the trendline resistance. We are expecting price to retrace back to the pivot level ,in line with the 50% Fibonacci retracement level and 61.8% Fibonacci extension level, and bounce back up to the take profit level in line with 23.6% Fibonacci retracement and 100% Fibonacci extension . Our potential bullish bias is further supported by the golden cross formed by the 50 period MA and 200 period MA, as well as the Stochastic indicators where the %K line is abiding the ascending trendline. 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.
Long
by FXCM
CADCHF looking for shorts 🦐CADCHF on the 4h chart looks bearish. The price after the test of the 0.786 Fibonacci level is breaking the trendline and according to Plancton's strategy if the market will break below the support area 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
6
CADJPY SHORT - My trade of the week!We are expecting JPY strength after a strong bear run for JPY last week. We can see on the 4H the clear ABCDE correction here, expecting to top out at one of two strong resistance levels (marked on chart). With this combination, we can expect to have a high probability of a short on this pair! We may well see either: a.) Slightly higher test of resistance in the final phase of correction - will need to monitor b.) Earlier than expected drop - a safe entry would be when we see price fall through the base of the correction channel marked on the chart. Like what you see? Please show some love and hit the like button. Do you have any comments? It would be great to hear from you! I prefer quality over quantity, and provide one strong idea a week. This is also the way I trade - but I keep those best ideas to myself for now. Good luck! DrBearForex
Short
by DrBear
1
CAD CHF - FUNDAMENTAL DRIVERSCAD FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BoC At the July meeting the BoC confirmed market’s speculation that they will continue to scale back asset purchases by tapering QE with another C$1bln reduction per week. Even though the bank’s language and overall tone was in line with overall consensus, the reaction in the CAD suggests that some participants might have been expecting more from the bank in terms of a hawkish tilt. The bank also reiterated that there is particular uncertainty in their projections and stressed that the economic recovery requires extraordinary policy accommodation, which arguably is something the bulls wanted to see removed in the statement. Even though the upcoming federal elections or the recent softer data patch won’t really alter the BoC’s policy normalization path, but with these two factors in mind the markets are expecting the central bank to take a bit of a cautious tone this upcoming week. 2. Commodity-linked currency with dependency on Oil exports Oil staged a massive recovery after hitting rock bottom in 2020. The move higher over the past few months has been driven by [b supply & demand (OPEC’s production cuts); improving global economic outlook and improving oil demand outlook (vaccines and monetary and fiscal stimulus induced recoveries); rising inflation expectations. Even though further gains for Oil will arguably prove to be an uphill battle from here, the bias remains positive in the med-term as long as the current supportive factors and drivers remains intact. We will of course have short-term ebbs and flows as we’ve seen in recent weeks which could affect the CAD from an intermarket point of view, but as long as the med-term view for Oil remains higher that should be supportive for Petro-currencies like the CAD. 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 safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as 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 the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 4. CFTC Analysis Latest CFTC data for the CAD (updated until 31 August) showed a positioning change of -8725 with a net non-commercial position of -2848. After some substantial unwinding of oversubscribed net-long positioning, we’ve now seen CAD positioning move into net-short territory, where is exactly where we want it to be as it means there is a lot of room left to run to the upside in line with the overall bullish fundamentals. However, as the BoC is expected to strike a more cautious tone at this week’s upcoming meeting we are taking things patient with the Canadian Dollar until we get the BoC meeting and Canadian Federal elections out of the way. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish. 2. SNB Intervention Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and suggests that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful intervention lately. However, as intervention is always the possibility it’s a risk to always keep in mind when trading the CHF. 3. CFTC Analysis Latest CFTC data for the CHF (updated until 31 August) showed a positioning change of -119 with a net non-commercial position of +3975. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF still the third largest net-long positioning among the majors, which is at odds with the current fundamental bearish outlook for the currency. At the current level of positioning, one has to argue that the CHF offers attractive levels to sell into, especially versus the NZD which will is expected to offer very attractive carry yield if the RBNZ moves ahead with their planned hike projections. However, there might have been idiosyncratic factors providing support for the CHF, and any drastic escalation in risk off tones could still continue to provide support for the safe-haven currency.
by thunderpips
1
CADCHF took the liquidity at the 0.618 🦐CHFJPY on the daily chart is moving inside a retracement channel after the recent high. The price moved in a lower high lower low pattern over the trendline until the 0.618 Fibonacci level. At the moment the pair is trading close to a weekly resistance and according to Plancton's strategy if the price will break above we will set 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.
Long
by InkyGrip
16
CAD CHF BUY (CANADIAN DOLLAR - SWISS FRANC)CAD FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BoC At the July meeting the BoC confirmed market’s speculation that they will continue to scale back asset purchases by tapering QE with another C$1bln reduction per week. Even though the bank’s language and overall tone was in line with overall consensus, the reaction in the CAD suggests that some participants might have been expecting more from the bank in terms of a hawkish tilt. The bank also reiterated that there is particular uncertainty in their projections and stressed that the economic recovery requires extraordinary policy accommodation, which arguably is something the bulls wanted to see removed in the statement. 2. Commodity-linked currency with dependency on Oil exports Oil staged a massive recovery after hitting rock bottom in 2020. The move higher over the past few months has been driven by (1) supply & demand (OPEC’s production cuts); (2) improving global economic outlook and improving oil demand outlook (vaccines and monetary and fiscal stimulus induced recoveries); (3) rising inflation expectations (reflation). Even though further gains for Oil will arguably prove to be an uphill battle, the bias remains positive in the med-term as long as the current supportive factors and drivers remains intact. We will of course have short-term ebbs and flows as we’ve seen in recent weeks which could affect the CAD from an intermarket point of view, but as long as the med-term view for Oil remains higher that should be supportive for Petro-currencies like the CAD. 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 safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as 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 the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 4. CFTC Analysis Latest CFTC data for the CAD (updated until 17 August) showed a positioning change of +3217 with a net non-commercial position of +5877. The CAD’s positioning has seen a substantial unwind in the past few weeks after the CAD got a bit frothy after the April BoC policy meeting where the bank took a substantial hawkish tilt. However, in the past few weeks a lot of the froth has been washed out and with the bias for the CAD still bullish in the med-term , the current positioning means we could see med-term buyers stepping back in gradually. The 370 pip drop from last Friday alone does mean that short-term the CAD has seen quite a lot of appreciation so keep that in mind for some possible short-term bounces from key support. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish. Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and explained that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is actually trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, and without any meaningful FX intervention the CHF runs the risk of slowly creeping higher, especially versus the EUR. 2. CFTC Analysis Latest CFTC data for the CHF (updated until 17 August) showed a positioning change of -1543 with a net non-commercial position of +4094. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF still the third largest net-long positioning among the majors, which is at odds with the current fundamental bearish outlook for the currency. At the current level of positioning, one has to argue that the CHF offers attractive levels to sell into, especially versus the NZD which will is expected to offer very attractive carry yield if the RBNZ moves ahead with their planned hike projections. However, there might have been idiosyncratic factors providing support for the CHF, and any drastic escalation in risk off tones could still continue to provide support for the safe-haven currency.
by thunderpips
1
CADCHF Continuation Downside, Watch for correction Hi everyone: Some big movement in the last few days on USD. CHF, JPY pairs, and I was able to get in on the CADJPY sell. Looks like CAD pairs are getting weaker, and I can expect CADCHF to also continue its bearish price action. We can see after the initial bullish up move, price formed a pennant/triangle correction, but didn't not continue its originally move up. Instead it was reversal correction, price then push down impulsively, and formed a continuation correction. Latest price manages to impulse out of the correction, good sign of continuation. I will be waiting for a lower time frame continuation correction to form and complete, before jumping onto another sell on the CAD. Thank you
Short
by jojofang0901
16
CADCHF is above ascending trendline support, potential bounce!Price is above ascending trendline support and above pivot at 0.72125 which in line with 127.2% Fibonacci extension . It could potentially bounce from support and rise further to take profit at 0.73345 in line with our 61.8% Fibonacci retracement and 61.8% Fibonacci extension . Otherwise price may continue to bearish to stop loss at 0.71735 in line with -27.2% Fibonacci retracement and 141.4% Fibonacci extension . 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 interests 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.
Long
by FXCM
CAD CHF BUY (CANADIAN DOLLAR - SWISS FRANC)CAD FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BoC At the July meeting the BoC confirmed market’s speculation that they will continue to scale back asset purchases by tapering QE with another C$1bln reduction per week. Even though the bank’s language and overall tone was in line with overall consensus, the reaction in the CAD suggests that some participants might have been expecting more from the bank in terms of a hawkish tilt. The bank also reiterated that there is particular uncertainty in their projections and stressed that the economic recovery requires extraordinary policy accommodation, which arguably is something the bulls wanted to see removed in the statement. 2. Commodity-linked currency with dependency on Oil exports Oil staged a massive recovery after hitting rock bottom in 2020. The move higher over the past few months has been driven by (1) supply & demand (OPEC’s production cuts); (2) improving global economic outlook and improving oil demand outlook (vaccines and monetary and fiscal stimulus induced recoveries); (3) rising inflation expectations (reflation). Even though further gains for Oil will arguably prove to be an uphill battle, the bias remains positive in the med-term as long as the current supportive factors and drivers remains intact. We will of course have short-term ebbs and flows as we’ve seen in recent weeks which could affect the CAD from an intermarket point of view, but as long as the med-term view for Oil remains higher that should be supportive for Petro-currencies like the CAD. 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. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the CAD in the med-term . It seems that a lot of the concerns about positioning in the CAD has abated after the currency’s push lower and have seen participants being willing to trade the CAD back in line with its fundamental bullish outlook. 4. CFTC Analysis The CAD only saw some marginal positioning changes (-995) with the latest CFTC data updated until Tuesday 10 August. The CAD’s positioning has seen a substantial unwind in the past few weeks after the CAD got a bit frothy after the April BoC policy meeting where the bank took a substantial hawkish tilt. However, in the past few weeks a lot of the froth has been washed out and with the bias for the CAD still bullish in the med-term , the current positioning means we could see med-term buyers stepping back in gradually. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish. Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and explained that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is actually trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, and without any meaningful FX intervention the CHF runs the risk of slowly creeping higher, especially versus the EUR. 2. CFTC Analysis The CHF saw marginal positioning changes (+2135) with the latest CFTC data updated until Tuesday 10 August. The positioning for the CHF reveals the surprising strength of the currency over the past few weeks as it is now the third largest net-long positioning among the major currencies. At the current level of positioning, one has to argue that the CHF offers attractive levels to sell into, but as the above comments noted, there might have been idiosyncratic factors providing support for the CHF. However, if we see an escalation in risk off tones in the week ahead that could continue providing support for the safe-haven currency.
by thunderpips
5
CAD CHF BUY (CANADIAN DOLLAR - SWISS FRANC)CAD FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BoC At the July meeting the BoC confirmed market’s speculation that they will continue to scale back asset purchases by tapering QE with another C$1bln reduction per week. Even though the bank’s language and overall tone was in line with overall consensus, the reaction in the CAD suggests that some participants might have been expecting more from the bank in terms of a hawkish tilt. The bank also reiterated that there is particular uncertainty in their projections and stressed that the economic recovery requires extraordinary policy accommodation, which arguably is something the bulls wanted to see removed in the statement. 2. Commodity-linked currency with dependency on Oil exports Oil staged a massive recovery after hitting rock bottom in 2020. The move higher over the past few months has been driven by (1) supply & demand (OPEC’s production cuts); (2) improving global economic outlook and improving oil demand outlook (vaccines and monetary and fiscal stimulus induced recoveries); (3) rising inflation expectations (reflation). Even though further gains for Oil will arguably prove to be an uphill battle, the bias remains positive in the med-term as long as the current supportive factors and drivers remains intact. We will of course have short-term ebbs and flows as we’ve seen in recent weeks which could affect the CAD from an intermarket point of view, but as long as the med-term view for Oil remains higher that should be supportive for Petro-currencies like the CAD. 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. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the CAD in the med-term. It seems that a lot of the concerns about positioning in the CAD has abated after the currency’s push lower and have seen participants being willing to trade the CAD back in line with its fundamental bullish outlook. 4. CFTC Analysis The CAD only saw some marginal positioning changes (+2086) with the latest CFTC data updated until Tuesday 3 August. The CAD’s positioning has seen a substantial unwind in the past few weeks after the CAD got a bit frothy after the April BoC policy meeting where the bank took a substantial hawkish tilt. However, in the past few weeks a lot of the froth has been washed out and with the bias for the CAD still bullish in the med-term, the current positioning means we could see med-term buyers stepping back in gradually. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish. 2. CFTC Analysis Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and explained that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is actually trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, and without any meaningful FX intervention the CHF runs the risk of slowly creeping higher, especially versus the EUR. The positioning for the CHF reveals the surprising strength of the currency over the past few weeks as it is now the third largest net-long positioning among the major currencies. At the current level of positioning, one has to argue that the CHF offers attractive levels to sell into, but as the above comments noted, there might have been idiosyncratic factors providing support for the CHF. However, if the recent Fed rhetoric and Friday’s US jobs report sparks some risk off flows in the week ahead that could provide further support for the CHF, which means keeping a close eye on risk sentiment will be important as always.
by thunderpips
CAD CHF BUY (CANADIAN DOLLAR - SWISS FRANC)CAD FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BoC At the July meeting the BoC confirmed market’s speculation that they will continue to scale back asset purchases by tapering QE with another C$1bln reduction per week. Even though the bank’s language and overall tone was in line with overall consensus, the reaction in the CAD suggests that some participants might have been expecting more from the bank in terms of a hawkish tilt. The bank also reiterated that there is particular uncertainty in their projections and stressed that the economic recovery requires extraordinary policy accommodation, which arguably is something the bulls wanted to see removed in the statement. It’s important though to keep in mind that positioning has seen a lot of the positives for the CAD already reflected in the price since the hawkish tilt in April, which means the downside we’re seeing could still be some unwind from the prior upside as the market will need more and more positives to keep the upside momentum going. 2. Commodity-linked currency with dependency on Oil exports Oil staged a massive recovery after hitting rock bottom in 2020. The move higher has been driven by (1) supply & demand (OPEC’s production cuts); (2) improving global economic outlook and improving oil demand outlook (vaccines and monetary and fiscal stimulus induced recoveries); (3) rising inflation expectations (reflation). Even though further gains for Oil will arguably prove to be an uphill battle, the bias remains positive in the med-term as long as the current supportive factors and drivers remains intact, and as long as oil remains supported that should be supportive for the Petro-currencies like the CAD as well. 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. As a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the CAD in the med-term . It seems that a lot of the concerns about positioning in the CAD has abated after the currency’s push lower and have seen participants being willing to trade the CAD back in line with it’s fundamental bullish outlook. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish. Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind.
by thunderpips
1
CADCHF looking for shorts 🦐CADCHF after the last bearish impulse is testing the resistance area at the 0.5 Fibonacci level. According to Plancton's strategy if the conditions will be satisfied we can 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
26
CADCHF bullish breakout | 1st July 2021CADCHF has seen a bullish breakout from the descending trendline resistance-turned-support, and RSI is holding above the ascending trendline support as well. We could see a bounce at Buy Entry, in line with 38.2% Fibonacci retracement, 61.8% Fibonacci extension and horizontal overlap support, and rise towards 1st Resistance, in line with horizontal swing high resistance. 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.
Long
by FXCM