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USDCAD Technical Analysis 2016, 18.09 - 25.09: daily bullish breakout

18 September 2016, 15:04

Sergey Golubev

182

Daily price is located above Ichimoku cloud in the bullish area of the chart.

The price is on bullish breakout with ascending triangle pattern to be formed by the price to be crossed to above together with 1.3235 res. for the breakout to be continuing.
Chinkou Span line crossed the price to above for the breakout.
Absolute Strength indicator and Trend Strength indicator are evaluating the future trend as the primary bullish.
Nearest resistance levels are 1.3235 and 1.3253.
Nearest support levels are 1.2909 and 1.2763.

If D1 price breaks 1.2909 support level on close bar so the reversal of the primary bullish to the primary bearish market condition will be started with 1.2763 nearest daily bearish target to re-enter.
If D1 price breaks 1.3235 resistance level on close bar from below to above so the bullish trend will be continuing with 1.3253 level as a target.
If not so the price will be on bullish ranging within the levels.

Recommendation for long: watch close D1 price to break 1.3235 for possible buy trade
Recommendation to go short: watch D1 price to break 1.2909 support level for possible sell trade
Trading Summary: bullish

Resistance	Support
1.3235	1.2909
1.3253	1.2763

SUMMARY : breakout

TREND : bullish

#usdcad, technical analysis, Ichimoku

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Rachael Taylor 2016.09.18 13:47 #1

breakout is good for USD and bad for CAD?

Patti 2016.09.18 13:50 #2

in case of USD/CAD - yes.

EmmeMe 2016.09.18 13:57 #3

yes, but we will not see any breakdown for this year i think

Sergey Golubev 2016.09.19 07:16 #4

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Sergey Golubev, 2016.09.17 10:38

Weekly Outlook: 2016, September 18 - September 25 (based on the article)

The US dollar had a positive week, resisting unconvincing data. Now comes the biggest test: the Fed decision. In addition, we have US Building Permits, rate decisions in Japan and in New Zealand, as well as other events. These are the main events for this week.

US Building Permits: Tuesday, 12:30. The number of new residential permits is expected to rise to 1.17 million in August.
Stephen Poloz speaks: Tuesday, 17:45. BOC Governor Stephen Poloz will speak in Quebec.
Japan rate decision: Wednesday.
US Crude Oil Inventories: Wednesday, 14:30.
US Fed Decision: Wednesday: statement and projections at 18:00, Yellen’s press conference at 18:30.
NZ rate decision: Wednesday, 21:00. Governor Graeme announced new lending restrictions for property investors to cool the housing market and enable further rate cuts in the coming months.
US Unemployment Claims: Thursday, 12:30. Economists expect the number of claims will reach 261,000 this week.

Sergey Golubev 2016.09.19 07:21 #5

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Sergey Golubev, 2016.09.17 11:59

Fundamental Weekly Forecasts for Dollar Index, GBP/USD, AUD/USD, NZD/USD, USD/CAD, USD/CNH and GOLD (based on the article)

Dollar Index - "In the event of full-scale risk aversion, the Dollar will not immediately jump to its haven status. Rather, the first phase of sentiment souring would be a diminished economic outlook and the subsequent loss of further yield potential. The more rapidly confidence falls apart, the better for USD as it will revive the absolute safe haven role. Sentiment however does not just hang on the Fed alone. We have seen volatility and volume rise through other contributions this past week. The BoJ’s quickly failing credibility along with the all-out doves could spark fears for the end of a stimulus-supported market boom. Brexit fears stirred this past week could infect deeper financial flaws. Or, the ‘animal spirits’ themselves could rise. Watch sentiment and the Fed through these tenuous times."

GBP/USD - "In turn, GBP/USD may continue to shed the advance from the August low (1.2854), with the exchange rate failing to preserve the monthly opening range, and the pair may ultimately threaten the post ‘Brexit’ wedge/triangle formation in the days ahead should the FOMC meeting boost interest-rate expectations. However, the pair may continue to consolidate within the near-term holding pattern if Fed officials largely endorse a wait-and-see approach for monetary policy and show a greater willingness to further delay the normalization cycle."

AUD/USD - "Although Fed officials have claimed that every policy meeting may produce a rate hike, their clear desire not to trigger market panic suggests that they will not opt to change things without an opportunity to thoroughly explain in detail. This means that after this week’s outing, the next opportunity for stimulus withdrawal comes in December. Between now and then, another opportunity to update traders will come in November, offering the FOMC a chance to up- or down-shift the projected rate hike path and limit surprise risk. Keeping this flexibility will mean that the narrative emerging from the upcoming announcement will need to be cautious but unmistakably hawkish. This bodes ill for risk appetite as well as the Aussie’s yield advantage, threatening to deliver the currency a third consecutive weekly loss."

NZD/USD - "We’re going to hold a neutral forecast on the New Zealand Dollar for the week ahead, with a warning of caution around this upcoming RBNZ meeting as the bank will be making the announcement in what could be extremely volatile market conditions in the wake of FOMC."

USD/CAD - "The heavy economic data points this week will take place on Friday, which will be after the dust settles from the international development such as the Central Bank triple-header on September 21. On Tuesday, Bank of Canada Governor Stephen Poloz will be speaking in Quebec City, which will be followed by a press conference. Friday will provide the Canadian Dollar an opportunity to reverse its trend of negative economic surprises with Retail Sales (exp. -0.1 MoM), and the Consumer Price Index (exp. 1.3% YoY.) Because this is the key gauge for inflation in Canada, a disappointment here coupled with positive developments south of the Canadian Border could put further selling pressure on the Loonie."

USD/CNH - "Next week, traders will want to watch two indicators for clues of the lower bound of the USD/CNH: A) The PBOC’s guidance – the last Yuan fix issued by the PBOC before the holiday was 6.6726. The USD/CNH has already traded below this level. Yuan’s reference rate set after the reopen of onshore markets could tell us whether the Central Bank confirms this Yuan strength. B) HIBOR rates: tightened Yuan liquidity will increase the cost of shorting the Yuan and thus could hold the USD/CNH at low levels. The average level of HIBOR O/N in August was 1.41% and the average over the past 12 months was 2.56%. If the HIBOR read on next Monday is still significantly higher than these levels, it may indicate uneased condition in offshore and a stronger Yuan."

GOLD (XAU/USD) - "Gold is eyeing a key near-term support confluence into the close of the week at 1302/04 where the 100% extension of the decline off the early high converges on the 100-day moving average, the monthly low & the May high. The immediate downside bias is at risk while above this level near-term with initial resistance eyed at the monthly low-day close at 1323 backed by 1330."

Sergey Golubev 2016.09.20 13:18 #6

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Sergey Golubev, 2016.09.20 15:14

Intra-Day Fundamentals - EUR/USD, USD/CAD and AUD/USD: U.S. Residential Building Permits

2016-09-20 12:30 GMT | [USD - Building Permits]

past data is 1.14M
forecast data is 1.17M
actual data is 1.14M according to the latest press release

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - Building Permits] = Annualized number of new residential building permits issued during the previous month.

==========

From Business Insider article:

U.S. housing starts fell more than expected in August as building activity declined broadly after two straight months of solid increases, but a rebound in permits for single-family dwellings suggested demand for housing remained intact.

Groundbreaking decreased 5.8 percent to a seasonally adjusted annual pace of 1.14 million units, the Commerce Department said on Tuesday. July's starts were unrevised at a 1.21 million-unit pace.

Permits for future construction slipped 0.4 percent to a 1.14 million-unit rate last month as approvals for the volatile multi-family homes segment tumbled 7.2 percent to a 402,000 unit-rate. Permits for single-family homes, the largest segment of the market, surged 3.7 percent to a 737,000-unit pace.

Economists polled by Reuters had forecast housing starts falling to a 1.19 million-unit pace last month and building permits rising to a 1.17 million-unit rate.

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EUR/USD M5: 11 pips range price movement by U.S. Building Permits news events

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USD/CAD M5: 20 pips price movement by U.S. Building Permits news events

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AUD/USD M5: 13 pips price movement by U.S. Building Permits news events

Sergey Golubev 2016.09.20 17:20 #7

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Sergey Golubev, 2016.09.20 19:12

USD/CAD Intra-Day Fundamentals: Bank of Canada Gov Poloz Speaks and 32 pips range price movement

2016-09-20 16:50 GMT | [CAD - BoC Gov Poloz Speaks]

past data is n/a
forecast data is n/a
actual data is n/a according to the latest press release

[CAD - BoC Gov Poloz Speaks] = Speech at the Chartered Financial Analysts Society, Quebec.

==========

"It’s time to conclude. What I’ve tried to do today is be clear about the forces that have brought about this period of ultra-low interest rates and help identify the implications. While monetary policy actions played a role in the decline of interest rates, the Bank sets its policy rate to meet its primary mission: returning inflation sustainably to target, thus helping to get the economy back to full output. In this sense, ultra-low interest rates are a symptom of the conditions we face, conditions that we believe are improving over time."

"But some of the forces leading to low interest rates will persist for a long time, so we need to prepare for lower for longer. Individuals need to plan for retirement with different assumptions about longevity, interest rates and growth. Businesses need to make sure their expectations about investment returns reflect the current and likely future reality and reconfigure their investment plans accordingly. And policy-makers need to make sure they are working to increase the economy’s potential output and reduce uncertainty—whether economic, political or regulatory—that may be holding back investment."

"What the Bank can, and will, continue to do is to provide certainty about the future value of money through inflation control. Together, we can make the necessary adjustments and boost confidence that will foster the economic growth we all want to see."

==========

USD/CAD M5: 32 pips range price movement by Bank of Canada Gov Poloz Speaks news event

Sergey Golubev 2016.09.21 19:05 #8

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Sergey Golubev, 2016.09.21 20:48

Intra-Day Fundamentals - EUR/USD, USD/CAD and AUD/USD: FOMC Statement and Federal Funds Rate

2016-09-21 18:00 GMT | [USD - Federal Funds Rate]

past data is 0.50%
forecast data is 0.50%
actual data is 0.50% according to the latest press release

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - Federal Funds Rate] = Interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight.

==========

From ft article: Fed fund futures see 60% chance of 2016 rate hike

"The Federal Reserve has voted to punt an interest rate hike into the long grass again, but investors still reckon that there is a decent chance of an increase by the end of the year, according to interest rate futures."

"Fed fund futures, contracts that investors use to bet on interest rate movements, imply that there is a 60 per cent chance of a hike at the December meeting, up slightly from 59 per cent ahead of today’s decision, reports Robin Wigglesworth in New York."

==========

EUR/USD M5: 61 pips range price movement by Federal Funds Rate news events

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AUD/USD M5: 67 pips range price movement by Federal Funds Rate news events

==========

USD/CAD M5: 93 pips range price movement by Federal Funds Rate news events

Sergey Golubev 2016.09.22 13:03 #9

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Sergey Golubev, 2016.09.22 14:51

Intra-Day Fundamentals - EUR/USD, USD/CAD and AUD/USD: U.S. Jobless Claims

2016-09-22 12:30 GMT | [USD - Unemployment Claims]

past data is 260K
forecast data is 261K
actual data is 252K according to the latest press release

if actual < forecast (or previous one) = good for currency (for USD in our case)

[USD - Unemployment Claims] = The number of individuals who filed for unemployment insurance for the first time during the past week.

==========

From MarketWatch article: Jobless claims fall to lowest level since July

"Initial claims for U.S. unemployment-insurance benefits fell to the lowest tally since July, signaling a strong labor market, according to government data released Thursday."
"The number of people who applied for U.S. unemployment-insurance benefits fell by 8,000 to 252,000 in the week that ended Sept. 17, the Labor Department reported."
"That is the lowest level since mid-July and only modestly above the four-decade low of 248,000 hit in April."
"The government said there were no special factors in the report. This marks 81 weeks that initial claims are below the key 300,000 level, the longest streak since 1970."
"Economists polled by MarketWatch had expected the government to report that initial claims for regular state unemployment-insurance benefits would be just about unchanged in the week that ended Sept. 17, from the 260,000 in the prior week."
"Longer-run trends also showed improvement, with the four-week average of new claims falling 2,250 to 258,500."
"Economists say few layoffs alongside steady hiring rates implies that solid payroll employment growth lies ahead."
"Fed Chairwoman Janet Yellen said Wednesday at her quarterly press conference that data suggests the labor market still has more room to improve without overheating the economy. That gives the Fed the ability to hold interest rates steady, she said."

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EUR/USD M5: 7 pips range price movement by U.S. Jobless Claims news events

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AUD/USD M5: 8 pips price movement by U.S. Jobless Claims news events

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USD/CAD M5: 11 pips range price movement by U.S. Jobless Claims news events

Sergey Golubev 2016.09.23 11:16 #10

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Sergey Golubev, 2016.09.23 13:08

Trading News Events: Canada Consumer Price Index (adapted from the article)

"Despite forecasts for a uptick in Canada’s Consumer Price Index (CPI), a marked slowdown in the core rate of inflation may drag on the loonie and spur a near-term rebound in USD/CAD as it puts pressure on the Bank of Canada (BoC) to further support the real economy."
"Easing price pressures may push the BoC to adopt a dovish outlook for monetary policy as the central bank warns ‘risks to the profile for inflation have tilted somewhat to the downside since July,’ and Governor Stephen Poloz may prepare Canadian households and businesses for lower borrowing-costs as global growth in the first half of 2016 was slower than the Bank had projected'."

Bullish CAD Trade: Headline & Core CPI Beat Market Expectations

"Need to see red, five-minute candle following the release to consider a short trade on USD/CAD."
"If market reaction favors a bullish loonie trade, sell USD/CAD with two separate position."
"Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward."
"Move stop to entry on remaining position once initial target is hit; set reasonable limit."

Bearish CAD Trade: Canada Inflation Report Disappoints

"Need green, five-minute candle to favor a long USD/CAD trade."
"Implement same setup as the bullish Canadian dollar trade, just in reverse."

Daily price is located within 200-day SMA (200 SMA) and 100-day SMA (100 SMA) in the ranging bearish area of the chart waiting for the direction of the trend: the price was bounced from 200 SMA level and 1.3253 resistance level to below for the 100 SMA with 1.2999 to be tested to below for the primary bearish trend to be resumed. RSI indicator is estimating the ranging condition to be continuing in the near future.

If D1 price breaks 1.3253 resistance level to above on close daily bar so the reversal of the price movement from the ranging bearish to the primary bullish market condition will be started.
If price breaks 1.2999 support to below on close daily bar so the primary bearish trend will be resumed with 1.2821 nearest daily target.
If not so the price will be ranging within the levels.

(all images/charts were made using Metatrader 5 software and free indicators from MQL5 CodeBase)

Sergey Golubev 2016.09.23 14:10 #11

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Sergey Golubev, 2016.09.23 16:06

USD/CAD Intra-Day Fundamentals: Canada's Consumer Price Index and 123 pips range price movement

2016-09-23 12:30 GMT | [CAD - CPI]

past data is 1.3%
forecast data is 1.4%
actual data is 1.1% according to the latest press release

if actual > forecast (or previous one) = good for currency (for CAD in our case)

[CAD - CPI] = Change in the price of goods and services purchased by consumers.

==========

From official Statistics Canada source: The 12-month change in the Consumer Price Index (CPI) and the CPI excluding gasoline

==========

USD/CAD M5: 123 pips range price movement by Canada's Consumer Price Index news event

Sergey Golubev 2016.09.24 12:35 #12

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USDCAD Technical Analysis 2016, 25.09 - 02.10: bullish to be resumed or the reversal to be started

Sergey Golubev, 2016.09.24 14:29

Daily price is located above Ichimoku cloud in the bullish area of the chart: the price is on ranging within the following support/resistance levels:

1.3253 resistance level located in the bullish area of the chart, and
1.2999 support level located in the beginning of the bearish trend to be started.

Absolute Strength indicator is estimating the ranging condition to be continuing, and Trend Strength indicator are evaluating the trend as the primary bullish in the near future.

If D1 price breaks 1.2999 support level on close bar so the reversal of the price movement from the ranging bullish to the primary bearish market condition will be started.
If D1 price breaks 1.3253 resistance level on close bar from below to above so the bullish trend will be resumed.
If not so the price will be on bullish ranging within the levels near bearish reversal area.

Recommendation for long: watch close D1 price to break 1.3253 for possible buy trade
Recommendation to go short: watch D1 price to break 1.2999 support level for possible sell trade
Trading Summary: ranging

Resistance	Support
1.3253	1.2999
N/A	1.2763

SUMMARY : ranging

TREND : bullish

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USDCAD Technical Analysis 2016, 18.09 - 25.09: daily bullish breakout

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