US DOLLARS DIRECT
The pricing of the US dollar was quite confusing during Monday’s trading session. Greenback faced high sales pressure Jeen, but it was balanced by force against commodity currencies like Australian dollar and the Canadian dollar. USD/ CAD pricing reached 60 points per day, probably with lower help crude oil price. There is a strong positive correlation between CAD and oil. As such, the Canadian dollar could continue to trade on its hind legs as long as global growth problems persist and crude oil remains under pressure.
Meanwhile, the US dollar is still looking for direction as bulls and bears collide on whether or not the Fed will cut asset purchases this year. This will focus on catalysts that may affect Fed’s narrowed time scale – such as upcoming monthly retail data. Although the retail report, which comes on Tuesday at 12.30 GMT, does not cause some volatility, although it is not as severe as inflation or employment data. It’s to see how hard it is economic data – such as retail – reinforces or undermines the report on bad consumer sentiment published at the end of last week.
USD / CAD PRICE CARD: DAILY FRAME (MARCH 24 to AUGUST 16, 2021)
This means that better-than-expected retail sales data may keep the Fed under pressure to start reducing asset purchases before the end of the year. On the other hand, disappointing retail figures can be seen as the reason why FOMC officials remain patiently receptive, given the resurgence of the COVID problems and the downside risks to the economy. In the first scenario, US dollar bulls would likely see a boost, while the latter could respond to the general weakness of the US dollar. Nevertheless, from a technical point of view, USD / CAD price activity is struggling between two conflicting trend lines.
Technical resistance, highlighted by a short-term declining trend line, may keep the last bear’s foot under the USD / CAD cover at 38.2% Fibonacci retracement. Although the July 27 eclipse at the 1,2600 handle on the US dollar bulls could pave the way for the high rise of July 19, before the previous year’s records return to focus. An upward trend in the medium term puts upward pressure on USD / CAD pricing when lower is lower. The nearby support looks intimidating, supported by low monthly figures in addition to the lower Bollinger bar and the 50-day moving average, both slightly below.
Continue reading – US Dollar Forecast: FOMC minutes Fed Fed cut
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