Canadian dollar hotspots
Recent decline in USD / CAD It appears to have stalled as it seeks to prolong last week ‘s series of ups and downs, and the exchange rate could consolidate ahead of employment reports from the US and Canada as Federal Reserve officials tame speculation over a threatening change in monetary policy.
USD / CAD Outlook hinges for US and Canadian employment reports
USD/CAD tries to watch the next decline Federal Open Market Committee (FOMC) Interest Rate Decision as governor Lael Brainard stresses that “unemployment remains high“, The permanent member of the Committee stating that”employment needs to go“ Speaking at the annual meeting of the Aspen Economic Strategy Group.
As a result, Brainard demands that he “we hope to be more confident in assessing progress when we have the September data, ”And waiting can cause a headwind US dollar before the next Fed interest rate decision on September 22, as the central bank promises topaying attention to changing conditions and consistently approaching the implementation of policies in our new framework step by step. “
However, the US non-agricultural payroll accounts (NFP) may put pressure on the report FOMC adjust further monetary policy guidelines, as the economy is expected to add 900,000 jobs in July and the Bank of Canada (BoC) may eventually face a similar situation, with employment projected to increase by 177.5,000 over the same period.
Recent data printouts from the US and Canada, in turn, are likely to affect the near-term outlook for the USD / CAD, as both the FOMC and the BoC adopt a results-based approach to monetary policy, but the exchange rate continues to depreciate. the interest rate may contribute to the recent change in retail sales, as at the beginning of this year.
IG customer feelings report shows 69.82% of traders are now net length USD / CAD, traders with a long and short relationship standing 2.31 to 1 p.m.
The number of traders in net length is 4.14% higher than yesterday and 3.12% lower than last week, while the number of short traders is 27.22% higher than yesterday and 3.37% lower than last week. The decline in the long net position is due to the fact that the USD / CAD traded at a monthly low (1.2422) after the Fed’s interest rate decision, while the decline in the short net interest rate has helped maintain crowding out, as 69.20% of traders were a couple last week long.
That being said, in further depreciation USD / CAD may encourage a change in retail sentiment, such as the behavior observed earlier this year, but the exchange rate may consolidate before the release of key data from the US and Canada as it seeks to prolong last week’s series of lower ups and downs.
USD / CAD exchange rate daily schedule
Source: Trading View
- Keep in mind that the USD / CAD 200-day SMA (1.2595) continues to reflect a negative slope, as the exchange rate did not remain above the moving average in July, as annual low (1,2007) does not help to experiment Highest in January (1,288).
- Recent developments Relative Strength Index (RSI) shows a similar dynamics, as it pulls up the trend of last year after the textbook sales signal flashed last month, and the decline from the July peak (1.2808) may indicate a continuation of the broader trend as it appears to have started to develop in the RSI.
- Need to pause / close below 1.2410 (expansion 23.6%) et 1.2440 (23.6% expansion) zone to bring 1.2360 (100% expansion) radar area, with the next area of interest being about 1.2250 (50% retracement) to 1.2260 (38.2% expansion).
- However, there is no momentum to break / close below 1.2410 (expansion 23.6%) et 1.2440 (23.6% expansion) zone may push USD / CAD back to the 1.2510 (78.6% retracement) region, with the next region of interest to be around 1.2620 (50% retracement) to 1.2650 (78.6% expansion).
– Written by David Song, currency strategist
Follow me on Twitter at @DavidJSong