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USDCAD - Waiting for CAD Rate AnnouncementThe USDCAD pair has been sideway after a quick drop and rebounce as 3 of the Fed members spoke dovishly. Today is gonna be a big day for CAD. Generally since Bank of Canada is expected to keep rate, the hint will be in the statement so we may see a bit more volatility back and forth during the announcement as people figuring out their next move. Looking forward on the calendar we generally have good numbers coming out for CAD while USD has some mixed signal with Trade Balance expected to be worsen while ISM Non-Manufacturing PMI expected to be good. Overall sentiment is bearish for USDCAD in my opinion, I would expect USDCAD to drift downward or flat toward news announcement. The IG Sentiment has Net Long so again, this makes me bearish. In fact if the USDCAD proceed to rise until nearer the rate decision, I will look to go Short as this provides very good risk-reward. Technical level to watch is round number 1.24 and 1.23, Weekly Pivot 1.2377.
Short
by vietbach1990
Bearish on TSX CanadaLooks extremely bearish and a good long term risk/reward trade is in the works (via ETF or some other instrument). Central Bank of Canada now between a rock and a hard place. allow CAD to continue appreciating and hurt exporters / dissuade foreign investment FED raises rates --> BoC follows pace in lockstep to protect CAD from falling too low (i.e., 60 cent range) or do they protect internal debt bubbles (housing, auto loans, consumer debt) by maintaining interest rates low at the expense of the CAD Regarding point (3) above, remember that CAD can appreciate even if BoC keeps rates low at which point BoC is out of options short of currency injections a la selling CAD on the open market. Macro Justifications Short term effects appreciating CAD hurt exporters and foreign investors (i.e., those looking to invest in Canadian companies --> TSX) Long term effects housing market unsustainable, on the verge of collapse among highest household debt per capita in the world (167% of adjusted household disposable income, Australia sits at 187%) debt of $2.029 trillion dollars on a workforce of 18.4 million out of 36 million population (51%) comes out to $110k debt per worker interest rate increases leading to mortgage debt distress (i.e., cannibalization of consumption in other sectors to make up mortgage payment shortfalls) NAFTA uncertainties? Macro is all about which levers push more in one direction or the other. - can the CAD appreciate in the event of an economic down turn? In turn giving BoC a free hand to stop protecting CAD and lower rates - proximity affect of US inflation on Canada, although Canada experienced relatively no downturn during 2008 - 2009 US meltdown, so same could hold true now (i.e., US growth continues, Canada has economic crisis) From this article: www.bloomberg.com "It takes just a 5 percent increase to inflict the same economic impact as a quarter-point hike in the Reserve Bank of Australia’s cash rate, according to Paul Bloxham, chief economist for Australia at HSBC Holdings Plc, who previously worked at the central bank."
TSX:TSXShort
by PontusTrader
Selling Position - CAD/JPYThe CAD/JPY pair has increased by more then 7/8% in a month. The RSI and Stochastic are indicating to me that its seriously overbought and its hitting a very strong resistance that has been around since 2015 so a correction will in order in with all these indication I feel that this is defiantly a sell. Keep in mind that the bank of Canada will more likely increase the interest rates on Wednesday which could cause a mild upside. The reason for me saying this is that this pair has increased 8% in about a month so the price could be already priced in.
Short
by Jamal92
USDCAD - Being Patient with BOC Rate StatementThe impulsive drop on USDCAD seems to have started with the weakening of US Dollar, and the hawkish sentiment from BOC recently. Looking at how price has developed, I will remain bearish on this pair for the remaining of 2017. However, I would prefer to be patient and wait for a decent correction towards 1.3122 before looking for a short opportunity again. Next week BOC Rate Statement might come in as anticipated and might give us the necessary correction. Here are 3 reasons for me to avoid shorting this pair immediately - 1) Price has met the minimum criteria fibonacci ratio for a 3rd wave down. This give us the expectation of seeing a wave 4 correction before another move lower. 2) We are seeing a RSI divergence forming. This show us that the bearish strength might have subsided and a correction is near. 3) On the hourly timeframe, we are seeing a potential expanding diagonal structure forming. This technical pattern is a reversal pattern and thus we believe the higher probability direction is to the upside - a very short term one though. So my trade plan next week? BE PATIENT WITH THE BOC RATE STATEMENT. **Definitely keeping a close watch on how price develop next week.
by KarYong
USDCAD - When Price Action Defies Logic... Or Not?The USDCAD made a new high at 1.38 in May and was subsequently met with a fierce downtrend for 1.5 months. Many breakout traders would have bought into the breakout at 1.3560 and would have been handsomely rewarded with a gain of at least 240 pips in the first up move. Yet, the good times did not last. Retracement traders who hoped to rejoin the uptrend with probable longs at the retest of the 1.3560 area were smacked with a 240pip loss with last night's move. One might argue that the uptrend is still intact, and it is - only if 1.3200 holds. Why do we say that price action defied logic? More USDCAD weakness expected attributing to: a. Oil price weakness b. Probable strength for dollar recovery given FOMC meeting on Thurs c. Weak Canadian Data So what then was the game changer? We would pin point it at Senior Deputy Governor at the BOC saying "current significant monetary policy stimulus in the system may be reduced, citing the ongoing recovery of the Canadian economy."
by revelationtrading
USDCAD - Time to Go Back UpHey Traders! Okay, a long-term trade for Monday. I'm thinking of going long on USDCAD very soon, reasons are the following: It has an incredibly strong support/resistance level @1.35 It is being traded in an uptrend channel and Right now it is at the 50% of the channel and 50% of the Fib. Ret. which I love to use - bit differently These are just some points that I am covering right now, there is also beautiful price action and candlestick formation but I will update this post as soon as I enter the trade. ONLY going to enter if the price can close above the 50%'s ..
by adamnkiss
BOC Interest Rate Decision This WeekThe BOC interest rate decision is scheduled at the end of this week on Friday. Based on the market consensus, we’re not going to see any meaningful shift in terms of the BOC monetary policy outlook. The BOC is widely expected to keep the benchmark interest rate at the record low of 0.5%. The BOC is not anticipated to hike rates until 2018 while on the other side of the monetary policy spectrum; we have the Fed, which has already hiked 3 times in the past 17 months. This only leaves the Canadian dollar exchange rate at risk. The BOC will reveal not just its interest rate decision, but we’re also going to get an updated monetary policy report, which can give traders further outlook on the strength of the Canadian economy. During the last BOC meeting, Governor Poloz had a balanced rhetoric. The BOC also updated its 2017 growth forecast and they expect the output gap to close in the first half of 2018 so earlier than expected, but at the same time, it’s too early to conclude the economy is on a stable or sustainable path. Based on the BOC assessment the CPI inflation headline of 2% is expected to fall back to 1.7% as the BOC continued to reiterate that considerable uncertainty remains in the market. In terms of the monetary policy outlook, there is no meaningful conviction that the BOC will be ready to move the interest rate off of record low. USD/CAD Technical story ahead of BOC The USD/CAD technical pattern remains bullish in the long-term. In the medium-term, the USD/CAD is trading above the yearly opening price 1.3415 which in essence can be the line in the sand for the bulls. To the upside, the big psychological number 1.4000 is the next big hurdle for the USD/CAD. Short-term the USD/CAD rally paused as we’ve seen oil prices rebound sharply. It’s been rumoured that OPEC nations and non-OPEC nations (Russia) are willing to extend their production cuts and the next OPEC meeting scheduled at the beginning of next month in Vienna. The BOC interest rate decision can be the catalyst for a breakout of the current range that USD/CAD has established in the past 2 weeks. A failure to preserve this bullish formation will be signalled by a break below the big round number 1.3500. Based on our Elliott Wave Analysis, we are USD/CAD to continue being pressured lower towards 1.3379 area before another potential move higher towards 1.4096 area. Going into this week BOC Rate Statement, we will be looking for short term sell opportunities. Conclusion The biggest threat to higher interest rate is the USA – Canada trade uncertainty which poses a notable downside risk to growth. It’s very unlikely that the BOC will even signal any shift in its interest rates policy anytime soon. With this in mind, we can safely assume that any USD/CAD false breakout to the downside should quickly fade away. Watch for the 1.3500 psychological number and the year opening price 1.3415 to hold the downside. However, a daily close below 1.3415 can signal a shift in the market sentiment.
by KarYong
1
CADUSD: Is this a bottom for the Canadian dollar?This level might be the bottom in this pair. Trump's tariff announcement might have created a negative enough sentiment to form a bottom here. From Zerohedge: "Canadians have had a tough time of it recently: they are getting inundated with illegal immigrants (thanks to Trudeau's welcome) and not benefitting from the wholesale emigration north that so many liberals promised if Trump was elected; housing has become unaffordable due to Chinese hot money flows encouraged by the government; the Canadian energy industry is hosed because of US shale production-driven low prices; and now the US imposes trade tariffs on another of their biggest exports." "The determination that Canada improperly subsidizes its exports is preliminary, and the Commerce Department will need to make a final decision. In addition, the U.S. International Trade Commission will need to find that the U.S. industry has suffered injury. But even a preliminary decision has immediate real-world consequences, by discouraging importers from buying lumber from Canada." www.zerohedge.com To me, as a contrarian, it sounds like a good opportunity, although the odds of the trade working are low, the payoff would be significant. Good luck, Ivan Labrie.
Long
by IvanLabrie
4