USDCAD news - page 48
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USD/CAD Weekly Forecast December 19-23
An important recovery in USD/CAD has kept the uptrend intact as the pair pushed higher from a rising trendline that extends back to lows posted in May. The turn higher was inspired by Wednesday’s Fed meeting as an upward revision in the rate hike forecast for 2017 caught markets by surprise, resulting in broad-based Dollar strength.
USD/CAD showed some resilience in the early week as an agreement made with non-OPEC oil producers to limit output had elicited a rally in WTI crude oil prices with a break to fresh highs for the year. Following a small gap lower at the weekly open, USD/CAD fell into a consolidation ahead of Wednesday’s FOMC meeting.
The recovery in the exchange rate has erased a bulk of losses realized in the first half of the month, negating the downside risk the pair was exposed to ahead of the Fed meeting. USD/CAD reached a low of 1.3080 in the past week and a close near the level on a monthly basis would have printed a bearish evening star pattern on the monthly chart, opening up the possiblity for a reversal in trend. The pair is not in the clear as of yet, but a break above the monthly open at 1.3356 would offer a strong bullish continuation signal.
While USD/CAD has been resilient as of late with a rally in crude oil prices remaining intact, the pair remains at risk. WTI crude oil (USOIL) closed the week out above important resistance at $51.50. The level had held the instrument lower for the year, ahead of the technical break in the past week. There was only a marginal weekly gain as the broader Dollar strength following the Fed meeting served to give back early week gains. Resistance at $53.94 capped gains for the week and remains notable overhead resistance in the upcoming week. The level marks prior resistance from the first quarter of 2015 and carries confluence with the 76.4% Fibonacci level measured from 2015 highs to 2016 lows.
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Canada Oct wholesale trade sales +1.1% vs +0.5% expected
Wholesale trade sales data from Statistics Canada
Canada October retail sales +1.1% vs +0.3% expected
Canadian retail sales data for October
Ex-autos
Canada October GDP -0.3% m/m vs 0.0% expected
Monthly Canadian GDP data from Statistics Canada
US Dollar To Canadian Dollar (USD CAD) Exchange Rate Tests December 2016 Best Thanks To Oil Price Fall
The USD to CAD exchange rate continued to climb over Thursday's trade despite weak demand for the US Dollar, as oil prices held the ‘Loonie’ at bay.
USD/CAD peaked on Thursday afternoon at a December best conversion rate of 1.3510 after the publication of the day’s solid US Q3 GDP figures, which indicated US growth was at a better than expected 3.5% year-on-year.
However, after some disappointing personal consumption results from November, the US Dollar’s advances were limited and USD/CAD fell from its highest levels while remaining 0.3% up on the day.
Despite the mixed nature of recent US data the US dollar has remained on a stronger footing, finding support from the more risk-averse mood of markets towards the close of 2016.
The underlying trend of the US Dollar (USD) has remained bullish as investors anticipate further monetary tightening from the Federal Reserve in the coming year.
Confidence in the ‘Greenback’ was further boosted by an unexpected uptick in existing home sales for November, with the domestic housing market showing further signs of resilience in spite of wider uncertainty.
As a result the US Dollar Canadian Dollar (USD CAD) exchange rate was encouraged to trend higher, particularly as the latest US crude oil inventories data showed a surprise increase in stockpiles, weighing heavily on oil prices.
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USD/CAD Weekly Forecast December 26-30
An important technical development has materialized in USD/CAD over the past week as the pair has scaled above the December open to return to positive territory for the month. The turn higher follows a notable decline in the first half of the month, where the pair tested lows posted in the month of October.
The exchange rate remains resilient as gains have transpired despite WTI oil prices hovering around highs for the year. After two consecutive weekly doji’s, USOIL continued to push higher this past week. The instrument closed at $53.19 on Friday, compared to the 2016 high posted last week at $54.48. Important resistance at $53.94 will tend to continue to be a big hurdle as the price point marks prior resistance from the first quarter of 2015 and a confluence is seen with the 76.4% Fibonacci level measured from 2015 highs to 2016 lows.
The US Dollar index (DXY) ended the week out flat as resistance at 103.54 continues to be a big barrier. The level marks a spike low from July of 2002 and held two rally attempts lower to trigger a range over the past six sessions. The weekly doji print will put the index at risk of a correction in the upcoming week.
Out of Canada in the past week, the consumer price index fell short of expectations at 1.2% annually, retail sales rose 1.1% in October, and the October GDP fell short of the analyst consensus with a 0.3% contraction. Out of the United States, durable goods orders declined 4.6%, third quarter GDP was revised up to 3.5% to beat the analyst consensus, and the core PCE price index ticked down to 1.6% on annual basis, falling short of expectations.
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USD/CAD Turns Lower As Commodity Currencies Recover
USD/CAD turned lower on Monday to erase a bulk of the gains from Friday. Commodity currencies are seen broadly higher on Monday, despite overall low volatility in most financial instrument because of the bank holiday.
Rising oil prices have also been weighing on the exchange rate as WTI crude oil prices extended higher. USOIL posted a daily doji on Friday and has turned higher within the broader uptrend. On an hourly chart, a succession of higher lows and higher highs from the low posted during Thursday’s North American session signals a continuation. Important resistance remains at $53.94 referencing prior resistance from the first quarter of 2015 as well as the 76.4% Fibonacci retracement from 2015 highs to 2016 lows.
USD/CAD has retreated ahead of resistance as the prior November highs as well as an important Fibonacci level is seen within close vicinity. A 50% retracement measured from 2016 highs to lows falls at 1.3575 and had triggered a turn lower in late November.
A daily bearish engulfing print in USD/CAD would signal the potential for a correction following sharp gains since the December 14 Fed meeting. On a 1-hour chart, near-term resistance is seen at 1.3538 and support falls at 1.3479. A break of the range would tend to clarify the near-term directional bias for the pair.USD/CAD Tests Key Fibonacci Level
USD/CAD extended higher for a fourth consecutive session to test a Fibonacci retracement that had triggered a four-week correction on a test in mid-November. Gains in the pair have come on the back of a weaker Loonie in today’s session, despite oil prices attacking yearly highs.
WTI crude oil prices have recovered most of the losses incurred during the week of the Fed monetary policy meeting as USOIL is seen testing important resistance at $53.94. The resistance level marks a 76.4% Fibonacci level measured from 2015 highs to 2016 lows and carries confluence with prior resistance from the first quarter of 2015. Oil prices have moved firmly higher since the weekly open and the reaction around the current resistance level will be important.
The US Dollar index (DXY) has consolidated within a narrow range through most of the day. The index fell into a range after a test of resistance at 103.54 on December 15 with support at 102.91 holding the downside on a daily basis. Holiday trading has encouraged the range to continue and a catalyst appears to be lacking for a break this week as volatility remains low following the bank holiday on Monday.
The Loonie has lost against all of its major counterparts on Tuesday to lead the decliner’s list. The Euro has posted the largest gains on the day, followed closely by the US Dollar.
Out of the United States, the Conference Board reported an increase in consumer confidence with the December figure printing at 113.7 to beat the analyst consensus of 108.9 and against a revised 109.4 in November.
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http://www.economiccalendar.com/2016/12/27/usdcad-tests-key-fibonacci-level/
USD/CAD Weekly Forecast January 2-6
USD/CAD traded in a volatile manner during December. In the first half of the month, a plunge took the currency pair below the October open. Losses were not sustained and a rally inspired by the December Fed meeting served to erase early month losses.
The past week was crucial in terms of assessing strength in the uptrend seen since May. The pair faced resistance from November highs on Wednesday but failed to clear the level, resulting in a substantial decline. The drop in the past week has caused a doji print for the month of December, signaling exhaustion in the uptrend.
Further adding to the potential of a correction from current levels is the technical break seen over the past week. The currency pair slid below channel support on Thursday from a channel that had been encompassing price action since the middle of the month.
Developments in the US Dollar index (DXY) have also not been supportive for USD/CAD bulls. A downside range break on Friday has signaled a turn lower in the index, after a two-week consolidation period. Support at 102.62 broke on the back of a surge in EUR/USD that occurred in between the North American close and the Asian open on Thursday and points to a shift in the near-term Dollar trend.
Volatility in WTI crude oil prices was subdued throughout the week as USOIL consolidated near significant resistance. The $53.94 price point marks prior resistance from the first quarter of 2015 as well as a 76.4% Fibonacci retracement as measured from 2015 highs to 2016 lows. The level will continue to be critical in the upcoming week and a bullish breach would stand to have bearish repercussions for USD/CAD.
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USD/CAD: The Case For Buying N-Term Dips Into 1.3350-1.3400 Range
The focus for CAD this week is a mix of external and internal drivers. US data and policy risks will certainly attract attention. Besides any surprises in the data, valuation and positioning will probably govern the price action. The latest CFTC positioning report showed that the market cut nearly all of its short exposure in CAD. This partly reflects yearend position squaring and net CFTC positioning looks roughly flat. Even so, we also note it was one the largest one week changes since July, leading us to believe that most of the stale CAD shorts have been purged.
Our CAD Sentiment index jumped from neutral to long and is now approaching levels that tend flag turning points. Risk reversals (3m) are tracking close to trend with the 3m zscore fairly close to neutral. All told, this leaves CAD vulnerable to the combination of softer local data and a pickup in momentum in the US. In this regard, this week’s Canadian employment report is likely to show a net loss of jobs following a string of positive releases.
What’s more, our HFFV model shows that USDCAD is trading cheap against its cyclical drivers, offering decent entry levels to establish new long USDCAD positions.
Our near-term bias is to buy the dips in to the 1.3350 to 1.3400 range.
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