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NZDCAD: Classic Bullish Reversal 🇳🇿🇨🇦 So it turned out that NZDCAD formed an inverted head & shoulders pattern on a daily. The price has easily broken and closed above its neckline. I believe that it will initiate a strong bullish movement. The initial target will be based on a falling trend line. The second target is horizontal structure based - 0.8168. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Long
by VasilyTrader
3
USD CAD - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE Hawkish Fed policy remains a key driver for Dollar strength. With headline inflation >9%, the Fed has been pressured to tighten policy aggressively, hiking rates by 75bsp at their June meeting, and continuing with Quantitative Tightening. However, as a result of increasing fears of a growth slowdown (as evidenced by recent econ data), STIR markets have repriced lower, and now expects a terminal rate of 3.5% (versus >4% before the June FOMC meeting). Even though lower STIR pricing should be negative for the USD, the growth concerns has sparked further risk off concerns and have seen safe haven flows into the USD. The USD is usually inversely correlated to the global economy and trade, appreciating when growth & inflation slows and depreciates when growth & inflation accelerates. Further expectations of a cyclical slowdown and continued tight monetary policy expectations has seen investors shun risk assets and even bonds (usually considered a safe haven), and the USD has been a key benefactor of the rush to safety in recent weeks. The current high inflation has meant that bonds have not been sought as a safe haven with a strong stock-to-bond correlation, and this has caused big bond outflows. With bonds not fulfilling its usual save haven role the USD has been the haven of choice. The bias remains bullish , but with stretched tactical and CFTC positioning we don’t want to chase the USD higher right now. POSSIBLE BULLISH SURPRISES As aggressive Fed policy has been supporting the USD, any incoming data ( S&P Flash PMI this week) that sparks further aggressive hike expectations, or comments from FOMC members that signals even more aggressive policy could trigger bullish reactions in the USD. As the cyclical outlook for the global economy is very bleak, and the USD is considered a safe haven, it means incoming data that exacerbates fears of recession and triggers a big rush to safety could trigger bullish USD reactions. Further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields like rising commodity prices, rising inflation expectations and upside surprises in inflation data could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES The USD has been reacting as a safe haven with recent US data, but the worse growth data gets, the higher likelihood of a ‘Fed Put’ in the months ahead. Thus, extremely bad growth data could trigger bearish reactions in the USD. Tactically the USD is trading at fresh cycle highs, and aggregate CFTC positioning is close to prior highs which acted as local tops. Thus, stretched positioning could make the USD vulnerable to mean reversion in the short-term, but finding strong enough bearish catalysts has been tricky recently. With a lot already priced for the Fed, it won’t take much for them to disappoint markets on the dovish side. Any FOMC comments that suggests more concern about the economy than inflation could trigger bearish reactions in the USD, but with inflation so high any dovish pivots seem unlikely for now. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressive and cyclical concerns put pressure on risk assets. We do also want to be mindful that lots has been priced for the USD, and as growth deteriorates, it could start to weigh on the USD if markets start pricing in a ‘Fed Put’, but based on where inflation is sitting any pivot seems still a while away and as the safe haven of choice any further recession focused downside in risk assets will likely continue to prove supportive for the USD. In the short-term though, with positioning looking stretched, we prefer much deeper pullbacks for new med-term USD longs and would look for short-term catalysts that offer shorter bearish sentiment trades against the current strong bull trend. CAD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE The CAD has enjoyed far more upside in the past few weeks than we anticipated. We’ve been cautious on the currency given Canada’s dependency on the US (>70% of exports) where the clear signs of a faster than expected slowdown and possible recession should deteriorate the growth outlook for Canada. Apart from that, the risks to the Canadian housing market can negatively impact consumer spending as interest rates rise higher at aggressive speed. Potentially damaging the wealth effect created by the rapid rise in house prices since covid. However, despite the risks to the economy and the outlook, markets still price in a very favourable growth environment for Canada, also supported by a big push higher in terms of trade due to the rise in commodity prices. Furthermore, despite clear warning signals, the BoC has chosen to ignore the negatives and has stayed surprisingly hawkish, hiking 1.0% in July. The market’s reaction after the 1.0% was quite telling though, with the CAD pushing lower aggressively afterwards. This suggests that those players that were long the CAD took the hike as a good reason to take profit at the highs, or it could be the market pricing in a possible pause for the BoC in the months ahead because hiking so aggressive now means reaching a level to pause their cycle much faster. Either way, we remain cautious on the CAD and favour short-term catalysts that provide us with shorting opportunities. POSSIBLE BULLISH SURPRISES As an oil exporter, oil prices are important for CAD. Catalysts that see further upside in Oil (deteriorating supply outlook, ease in demand fears) could trigger bullish CAD reactions. The correlation has been hit and miss in recent weeks though. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the CAD. Even though lots of tightening has been priced for the BoC , any overly hawkish comments from the BoC this week could trigger some short-term upside, but with a 75bsp hike already priced the risk is more titled to the downside. POSSIBLE BEARISH SURPRISES As an oil exporter, oil prices are important for CAD. Any catalyst that triggers meaningful downside in oil (deteriorating demand outlook, ease in supply shortage, less supply constraints) could be a negative catalyst for the CAD as well. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the CAD. With a lot of tightening priced into STIRs, and a 100bsp hike providing no support for the CAD, we think risks are skewed lower, and any big downside surprises in CPI this week could offer decent shorting opportunities for the CAD. BIGGER PICTURE The bigger picture outlook for the CAD remains neutral for now. Given the clear risks to the growth outlook due to the slowdown in the US, as well as rising risks to the consumer and the housing market, and potential negative impact for commodities like oil , we remain cautious on the currency (even though it’s moved much higher than we anticipated). With a lot of good news priced in, our preferred way of trading the CAD is lower on clear short-term negative catalysts.
by thunderpips
2
CAD JPY - FUNDAMENTAL DRIVERSCAD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE The CAD has enjoyed far more upside in the past few weeks than we anticipated. We’ve been cautious on the currency given Canada’s dependency on the US (>70% of exports) where the clear signs of a faster than expected slowdown and possible recession should deteriorate the growth outlook for Canada. Apart from that, the risks to the Canadian housing market can negatively impact consumer spending as interest rates rise higher at aggressive speed. Potentially damaging the wealth effect created by the rapid rise in house prices since covid. However, despite the risks to the economy and the outlook, markets still price in a very favourable growth environment for Canada, also supported by a big push higher in terms of trade due to the rise in commodity prices. Furthermore, despite clear warning signals, the BoC has chosen to ignore the negatives and has stayed surprisingly hawkish, hiking 1.0% in July. The market’s reaction after the 1.0% was quite telling though, with the CAD pushing lower aggressively afterwards. This suggests that those players that were long the CAD took the hike as a good reason to take profit at the highs, or it could be the market pricing in a possible pause for the BoC in the months ahead because hiking so aggressive now means reaching a level to pause their cycle much faster. Either way, we remain cautious on the CAD and favour short-term catalysts that provide us with shorting opportunities. POSSIBLE BULLISH SURPRISES As an oil exporter, oil prices are important for CAD. Catalysts that see further upside in Oil (deteriorating supply outlook, ease in demand fears) could trigger bullish CAD reactions. The correlation has been hit and miss in recent weeks though. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the CAD. Even though lots of tightening has been priced for the BoC, any overly hawkish comments from the BoC this week could trigger some short-term upside, but with a 75bsp hike already priced the risk is more titled to the downside. POSSIBLE BEARISH SURPRISES As an oil exporter, oil prices are important for CAD. Any catalyst that triggers meaningful downside in oil (deteriorating demand outlook, ease in supply shortage, less supply constraints) could be a negative catalyst for the CAD as well. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the CAD. With a lot of tightening priced into STIRs, and a 100bsp hike providing no support for the CAD, we think risks are skewed lower, and any big downside surprises in CPI this week could offer decent shorting opportunities for the CAD. BIGGER PICTURE The bigger picture outlook for the CAD remains neutral for now. Given the clear risks to the growth outlook due to the slowdown in the US, as well as rising risks to the consumer and the housing market, and potential negative impact for commodities like oil, we remain cautious on the currency (even though it’s moved much higher than we anticipated). With a lot of good news priced in, our preferred way of trading the CAD is lower on clear short-term negative catalysts. JPY FUNDAMENTAL OUTLOOK: BEARISH BASELINE The Yen has seen a lot of depreciation this year driven by very negative fundamentals. Yield differentials has by far had the biggest negative impact. With other major central banks starting aggressive hiking cycles, it has lifted yields quite dramatically, which has seen yields like US10Y push considerably higher than 10-year Japanese yields capped at 0.25% by yield curve control. That means dovish monetary policy remains a key negative driver. Despite inflation starting to push higher in Japan, and despite the lessons from other central banks now struggling with inflation last seen since the 70’s, the bank has once again at their June meeting stayed stubbornly dovish keeping yields capped at 0.25%. At this stage the bank is playing a very dangerous game by allowing the JPY to weaken, further adding to inflationary risks. Their dovish persistence remains a negative for the JPY. Even though the JPY is considered a safe haven, inflows has been limited compared to other cycles. The reason is Japan’s current account surplus (a main reason for safe haven appeal) has deteriorated due to the rise in commodity prices. Japan imports over 90% of their energy commodities, so continued rise in oil prices has added to downside and eroded some safe haven appeal. The BoJ and MoF’s reluctance to intervene to stop the rapid depreciation in the JPY in recent weeks has been noticeable. As long as they just voice their dislike but fail to act, the market will keep testing them and shorting the JPY. POSSIBLE BULLISH SURPRISES Catalyst that triggers speculation that the BoJ could drop YCC or hike rates or both (big upside surprises in inflation) could trigger upside in JPY, which means inflation data will be important to keep on the radar. Catalysts that trigger meaningful corrections in US10Y (less hawkish Fed, faster deceleration in US inflation, faster deceleration in US growth) or meaningful bouts of risk off sentiment could trigger bullish reactions from the JPY. Any catalyst that triggers meaningful downside in key commodities like Oil (deteriorating demand outlook, ease in supply shortage) could trigger bullish JPY reactions. Any intervention from the BoJ or MoF to stop JPY depreciation (buying the JPY or giving firm and clear lines in the sand for USDJPY) could offer decent reprieve for the JPY. POSSIBLE BEARISH SURPRISES With yield differentials playing such a huge role for the JPY, any catalysts that push US10Y higher (more aggressive Fed, further acceleration in US inflation, better-than-expected US growth data) could trigger further bearish price action for the JPY. Any catalyst that creates further upside in oil prices (further supply concerns, geopolitical tensions) poses downside risks for Japan’s current account surplus and could trigger further bearish reactions in the JPY. Further reluctance from the BoJ and MoF to address the concerning depreciation in the JPY, and further reluctance from the BoJ to pivot away from very dovish policy is a continued negative driver for the JPY to keep on the radar. If the BoJ pushes back against calls for a policy shift despite upside surprise in CPI could trigger further JPY downside. BIGGER PICTURE The bigger picture remains bleak for the JPY, especially after the BoJ once again stuck to the same overly dovish script at their June meeting. As long as US10Y gains ground and as long as the BoJ stays stubbornly dovish and no push back is made against the JPY weakness from the BoJ or MoF, the bias remains lower. Take note that positioning has been stretched (tactically and CFTC) for some time, which means we don’t want to chase the JPY lower and bullish reactions can see outsized upside. It also means watching incoming CPI data closely as any huge upside surprises could trigger speculation of a possible policy shift.
by thunderpips
1
CAD-JPY Key Levels Analysis! Buy! Hello,Traders! CAD-JPY has retested a key resistance level at 107.118 And is now going down and there is also a rising support present On the higher timeframes so it can not be see on this chart So we will first see how the pair interacts with the rising line And then if the price manages to break it We will see a retest of the support level at 103.803 From where I would be expecting a rebound and a move up Buy! Like, comment and subscribe to boost your trading! See other ideas below too!
Long
by TopTradingSignals
3
USDCAD Sell below the 1D MA50. Buy on Higher Low.The USDCAD pair has been trading within a 1 year Channel Up pattern as we've mentioned on our last analysis in early June: As you see, the rebound on the Channel's Higher Lows (bottom) trend-line worked perfectly as a buy entry and hit our Higher High target in short time. The price is now on a pull-back after the Higher Highs (broke above but still closed within the Channel Up) rejection and is testing the 1D MA50 (blue trend-line), which is holding as Support since June 10. A break below that level will be a short-term sell towards the inner Higher Lows zone (green shape) where we can enter a new buy just below the 0.236 Fibonacci retracement level. Long-term target = 1.21370 or the 1.1 Fib (1.31980) as a new Higher High. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
by TradingShot
GBPCAD: Classic Bearish Continuation 🇬🇧🇨🇦 As you remember, traders, we were very bearish biased on GBPCAD last week. Now it's time for an update! The pair is currently trading within a falling parallel channel. Reaching its resistance, the price formed a double top formation and broke its neckline then. I believe that the pair will drop to 1.54 / 1.5366 levels soon. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Short
by VasilyTrader
5
Today’s Notable Sentiment ShiftsCAD/BoC – The Bank of Canada raised rates by 100 basis points at its July meeting, its single biggest hike in 24 years. Furthermore, the central bank said more hikes would be needed. Commenting on their decision, BoC Governor Macklem said: “We had indicated we were prepared to be more forceful. Today was more forceful…Yes, it is a very unusual move to increase by 100 basis points at one decision and that really reflects the very unusual, exceptional circumstances that we find ourselves in.” NZD/RBNZ – The New Zealand dollar failed to get a lift on Wednesday after the RBNZ hiked rates by 50 basis points as expected and mostly stuck by its commitment to continue tightening policy “at pace”. Commenting on the meeting and future outlook, Capital Economics stated: “The committee acknowledged that clouds are appearing on the horizon. Our view remains that the ongoing housing downturn will weigh heavily on residential investment and constrain household spending, ultimately forcing the bank to stop hiking once the policy rate reaches 3.5% by year-end.”
by thunderpips
1
Today’s Notable Sentiment ShiftsCAD – The Canadian dollar weakened on Tuesday as oil prices tumbled. Still, losses for the currency were limited by growing expectations for an oversized interest rate hike this week by the Bank of Canada. Commenting on CAD, Adam Button – chief currency analyst at ForexLive, stated: “There’s a reluctance to sell the loonie ahead of a Bank of Canada decision. A three-quarter-point hike is widely priced in but that could also be coupled with hints at further large hikes.”
by thunderpips
CADJPY Trading plan based on simple break-outs.The CADJPY pair has been consolidating within a Triangle pattern since the June 08 High and basically supported by the 1D MA50 (blue trend-line) since early March. The 1W MACD is close to a Bearish Cross and with the 1D RSI practically neutral, the pattern draws similarities with the peak formation of June 2021. That sequence eventually broke below and turned the 1D MA50 into a Resistance, before marginally breaking below the Support. Currently the new Support is at 98.100 and this is best traded on break-outs. A break below the 1D MA50 again, will be a sell, aimed at 98.100 and quite possibly contact the 1D MA200 (orange trend-line). On the other hand, a break above the 107.100 High, will be a buy signal, targeting the -0.5 Fibonacci extension around 111.500. -------------------------------------------------------------------------------------------------------- Please like, subscribe and share your ideas and charts with the community! --------------------------------------------------------------------------------------------------------
by TradingShot
1
AUDCAD Testing the 1 year Support Zone!The AUDCAD pair dropped sharply yesterday, negating the gains of the past 5 days combined. In doing so, it touched again the Lower Lows zone trend-line that started after the July 30 2021 Low and has been supporting with rebounds ever since. With the 1W RSI well within its own Buy Zone since July 01, this is a solid buy opportunity at least on the short-term towards the 1D MA50 (blue trend-line). A break above can see a buying extension to the 1D MA200 (orange trend-line). Long-term buy positions can only be taken after a weekly candle closing above the 1D MA200. On the other hand, a break below the Lower Lows can be taken advantage with a sell hedge short-term, targeting the -0.5 Fibonacci extension. Previous AUDCAD signal: -------------------------------------------------------------------------------------------------------- Please like, subscribe and share your ideas and charts with the community! --------------------------------------------------------------------------------------------------------
Long
by TradingShot