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USDCAD Technical Analysis 2016, 09.10 - 30.10: daily bullish; weekly breakout - page 2

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Sergey Golubev, 2016.10.19 16:13

USD/CAD Intra-Day Fundamentals: BoC vernight Rate and 46 pips range price movement

2016-10-19 14:00 GMT | [CAD - Overnight Rate]

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

[CAD - Overnight Rate] = Interest rate at which major financial institutions borrow and lend overnight funds between themselves.

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From official report:

  • "The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent."
  • "The global economy is expected to regain momentum in the second half of this year and through 2017 and 2018. After a weak first half, the US economy in particular is strengthening: solid consumption is being underpinned by strong employment growth and robust consumer confidence. However, because of elevated uncertainty, US business investment is on a lower track than expected."
  • "Given the downward revision to the growth profile and the later closing of the output gap, the Bank considers the risks around its updated inflation outlook to be roughly balanced, albeit in a context of heightened uncertainty. Meanwhile, the new housing measures should mitigate risks to the financial system over time. At present, the Bank’s Governing Council judges that the overall balance of risks is still in the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent."

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USD/CAD M5: 46 pips range price movement by BoC vernight Rate news event


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Sergey Golubev, 2016.10.20 15:16

Intra-Day Fundamentals - EUR/USD and USD/CAD : Philadelphia Fed Business Outlook Survey

2016-10-20 12:30 GMT | [USD - Philly Fed Manufacturing Index]

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

[USD - Philly Fed Manufacturing Index] = Level of a diffusion index based on surveyed manufacturers in Philadelphia.

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From official report:

"The index for current manufacturing activity in the region edged down, from a reading of 12.8 in September to 9.7 this month. The index has now been positive for three consecutive months (see Chart 1). Other broad indicators showed notable improvement. The new orders index improved markedly this month, increasing from 1.4 in September to 16.3 in October. The percentage of firms reporting increases in new orders this month rose to 40 percent from 30 percent last month. The current shipments index also improved, rising 24 points to 15.3. The delivery times, unfilled orders, and inventories indexes remained weak, however, with all registering negative readings, although they were less negative than in September."


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EUR/USD M5: 75 pips range price movement by Philadelphia Fed Business Outlook Survey news events


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USD/CAD M5: 38 pips range price movement by Philadelphia Fed Business Outlook Survey news events



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Sergey Golubev, 2016.10.21 11:19

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

  • "A sharp rebound in Canada’s Consumer Price Index (CPI) may heighten the appeal of the Canadian dollar, but another downtick in the core rate of inflation may fuel the near-term rebound in USD/CAD as puts increased pressure on the Bank of Canada (BoC) to further support the real economy."
  • "The BoC may continue to ‘actively’ discuss more stimulus for the real economy amid the ongoing adjustment to the oil price shock, and the central bank may reestablish its easing cycle over the coming months as Governor Stephen Poloz and Co. now anticipate the economy to reach full-capacity ‘materially later than the Bank had anticipated in July.’ In turn, USD/CAD may continue to retrace the decline from earlier this year, but the BoC may preserve its current policy throughout the remainder of 2016 as the central bank argues the risks surrounding the inflation outlook are ‘roughly balanced.’"


Bullish CAD Trade: Canada CPI Rebounds in September

  • "Need green, five-minute candle to favor a long USD/CAD trade."
  • "If market reaction favors a long loonie trade, sell USD/CAD with two separate position."
  • "Set stop at the near-by swing low/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: Headline & Core Inflation Fall Short of Market Forecast
  • "Need red, five-minute candle to favor a short trade on USD/CAD."
  • "Implement same setup as the bullish Canadian dollar trade, just in the opposite direction."


Daily price is located near and above 200-day SMA (200 SMA) for the primary bullish market condition.

  • If D1 price breaks 1.3306 resistance level to above on close daily bar so the bullish trend will be continuing.
  • If price breaks 1.3005 support to below on close daily bar so we may see the bearish reversal of the daily price movement.
  • If not so the price will be on ranging within the levels.

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Sergey Golubev, 2016.10.21 14:48

USD/CAD Intra-Day Fundamentals: Canada's Consumer Price Index and 92 pips range price movement

2016-10-21 12:30 GMT | [CAD - CPI]

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.

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From official report:

  • "The Consumer Price Index (CPI) rose 1.3% on a year-over-year basis in September, following a 1.1% gain in August."
  • "Excluding gasoline, the CPI was up 1.5% year over year in September, after posting a 1.7% increase in August."
  • "On a seasonally adjusted monthly basis, the CPI increased 0.2% in September, after declining 0.1% in August."
  • "In September, four major components increased on a seasonally adjusted monthly basis, while three declined. The shelter index was unchanged."

Seasonally adjusted monthly Consumer Price Index:


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USD/CAD M5: 92 pips range price movement by Canada's Consumer Price Index news event



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Sergey Golubev, 2016.10.24 07:25

CAD: Weekly Outlook - Morgan Stanley (based on the article)


Daily price is on bullish breakout to be started in the end of the last week: the price is testing 1.3358 resistance level to above for the primary bullish trend to be continuing. For the week, the Morgan Stanley is suggesting for the traders to be in neutral with this pair for a week:

"In the latest meeting, the BoC revised their inflation and growth forecasts down and changed their wording on inflation risks to be "roughly balanced", which was less dovish than markets expected. However, Governor Poloz later said that the bank actively discussed the possibility of adding more stimulus, though it would require a shock or series of shocks for them to ease further. We think this means the Bank is willing to act if the economy takes another dip, but would need shocks such as a significant drop in oil, severe slowdown in the US economy or a US presidential outcome that could change NAFTA for them to deliver more easing. These scenarios look unlikely for now, therefore we turn neutral on CAD."

If D1 price breaks 1.3358 resistance to above on close bar so the bullish trend will be continuing.
If D1 price breaks 1.3090 support level to below so the reversal of the price movement from the bullish to the primary bearish market condition will be started.
If not so the price will be on bullish ranging within the levels.

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Sergey Golubev, 2016.10.25 08:00

USD/CAD Intra-Day Fundamentals: BoC Gov Poloz Speaks and 112 pips range price movement

2016-10-24 19:30 GMT | [CAD - BoC Gov Poloz Speaks]

[CAD - BoC Gov Poloz Speaks] = speech before the House of Commons Standing Committee on Finance, in Ottawa.

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From official report:

  • "It is our normal practice to appear before this committee twice a year to discuss the Bank’s Monetary Policy Report (MPR). We published our latest MPR last week and are happy to answer questions about it and other economic topics. However, I suspect you may also want to ask about the agreement with the federal government that was announced this morning, which renews our inflation-control framework for another five years. So, before we respond to questions, allow me to say just a few words on both topics, beginning with the MPR."
  • "We expect the government’s measures will restrain residential investment by curbing resale activity in the near term and lead to a modest change in the composition of construction toward smaller units. We estimate that this will leave the level of GDP 0.3 per cent lower at the end of 2018 than projected in July."
  • "Now, it is fair to say that even after years of very low interest rates, the recovery from the Great Recession in many economies remains weak. So it is not really surprising that some are wondering if monetary policy has lost its power. Low interest rates are actually doing a great deal to support the economy. To illustrate this point, if we were to raise interest rates to pre-crisis levels, say 3 to 4 per cent, there would be a significant contraction in the economy, and it is these contractionary forces that we are offsetting with low interest rates."

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USD/CAD M5: 112 pips range price movement by BoC Gov Poloz Speaks news event

 


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Something Interesting in Financial Video October 2016

Sergey Golubev, 2016.10.28 08:36

How to Trade the GDP Number

A lesson on what traders of the stock, futures, and forex markets look for when the Gross Domestic Product (GDP) Number is released.

As we have learned in previous lessons there are many components of the US Economy which can affect overall economic growth and inflation expectations. Some of the major examples here are how many people are employed in the economy vs. unemployed, how much the housing market is growing in different parts of the country, and at what rate the prices for different products in the economy are seeing increases.

As all of these things are so important to the economy and therefore to the markets, there are no shortage of economic reports which are released to try and help people gauge how things are going with different pieces of the economy. It is important for us as traders to understand the major reports here as even if we are trading off of technicals, understanding what is happening in the market from a fundamental standpoint can help establish a longer term bias for trading. In the short term an understanding of these numbers will also help to assess the erratic and sometimes extreme movements which can occur after economic releases.

The granddaddy of all economic reports is the release of the Gross Domestic Product (GDP) number for the economy. The Gross Domestic Product for the US or any other country is the final value of all the goods and services produced in that economy. Essentially what you get after calculating GDP by adding up the value of all goods and services produced in the economy is a measure of the size of the overall economy. It is for this reason that market participants will watch the GDP number closely as the rate of growth in this number represents the rate of growth in the overall economy.

As a side note here, GDP also allows a comparison to be made of the sizes of different economies from around the world, as well as their growth rates. To give you an idea of just how large the US Economy is, 2007 GDP for the United States was estimated at 13.7 Trillion dollars. This is in comparison to the next largest economy in the world, Japan which has a GDP of under 5 Trillion Dollars.

Quarterly estimates of GDP are released each month with Advance Estimates which are incomplete and subject to further revision being released near the end of the first month after the end of the quarter being reported. In the second month after the end of the quarter being reported preliminary numbers (which basically means more accurate than advanced) normally are released and then finally the final GDP number is released at the end of the 3rd month after the end of the quarter being reported on.

Traders are going to focus heavily on the growth rate released in the Advanced number and markets will also move on any significant revisions made in the preliminary and final GDP numbers.


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GBPUSD M5: 59 pips range price movement by USD - GDP news event:


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EURUSD M5: 42 pips rangeprice movement by USD - GDP news event:


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USDCAD M5: 83 pips price movement by USD - GDP news event:



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Sergey Golubev, 2016.10.28 14:59

Intra-Day Fundamentals - EUR/USD and USD/CAD : U.S. Gross Domestic Product (GDP)

2016-10-28 12:30 GMT | [USD - GDP]

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

[USD - GDP] = Annualized change in the inflation-adjusted value of all goods and services produced by the economy.

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From official report:


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EUR/USD M5: 24 pips range price movement by U.S. Gross Domestic Product news events


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USD/CAD M5: 39 pips range price movement by U.S. Gross Domestic Product news events



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