USD/CAD ANLAYSIS & TALKING POINTS
BoC assembly minutes counsel much less aggressive stance from the central financial institution.Canadian earnings & retail gross sales in focus alongside US GDP.Will USD/CAD respect trendline assist as soon as once more?
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CANADIAN DOLLAR FUNDAMENTAL BACKDROP
The Canadian greenback restoration could also be fading after final nights Financial institution of Canada (BoC) abstract of deliberations that highlighted the progress being made on the inflationary entrance. Regardless of Tuesday’s marginal beat on each core and headline metrics, there was no upside shift that’s trigger for concern at this level. Consequently, we’ve got seen a rise in cumulative rate of interest cuts (seek advice from desk beneath) for 2024 as markets now anticipate this to be the height of the cycle for the BoC.
BANK OF CANADA INTEREST RATE PROBABILITIES
Supply: Refinitiv
The financial calendar at the moment holds some essential information for Canada together with common weekly earnings and retail gross sales information. Earnings has been sticky and will likely be welcomed by the BoC ought to we see a transfer decrease. Retail gross sales has additionally been cussed of current no matter restrictive financial coverage and it will likely be attention-grabbing to see how shopper demand has been impacted for October.
From a USD perspective, US GDP , jobless claims and core PCE figures are scheduled later at the moment. GDP is anticipated to maneuver sharply increased which might stabilize the weakening dollar. The Fed’s Harker yesterday pushed again in opposition to reducing charges too early and will properly gai traction with different Fed officers.
USD/CAD ECONOMIC CALENDAR (GMT +02:00)
Supply: DailyFX Financial Calendar
TECHNICAL ANALYSIS
USD/CAD DAILY CHART
Chart ready by Warren Venketas, IG
Each day USD/CAD value motion above has bears testing the long-term trendline assist zone (black) which has held agency since June 2021. Whereas the Relative Energy Index (RSI) reveals momentum pushing out of oversold territory, a break beneath trendline assist can’t be dominated out. Bulls could also be on the lookout for a reversal however ought to train sound threat administration as a assist break might catalyze a major drop in direction of 1.3200 psychological stage.
Key resistance ranges:
Key assist ranges:
Trendline support1.33001.3200
IG CLIENT SENTIMENT DATA: MIXED
IGCS reveals retail merchants are at present web LONG on USD/CAD, with 76% of merchants at present holding lengthy positions (as of this writing).
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Change in
Longs
Shorts
OI
Each day
-5%
0%
-3%
Weekly
42%
-17%
16%
Contact and followWarrenon Twitter:@WVenketas
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