Canadian dollar hotspots
USD / CAD prolongs the withdrawal from the annual high (1.2949) as the relative strength index (RSI) falls back from the overbought territory to show the textbook sales signal, but The Kansas City Fed Economic Symposium is scheduled for August 26-28 may stay afloat if Federal Reserve officials show a greater willingness to change gears.
USD / CAD forecast: RSI sells signals ahead of Fed symposium
USD/CAD The exchange rate appears to have changed since the failed attempt to test the peak in December 2020 (1.3009) and a larger correction can be expected Jerome Powell and Co. support the wait and wait before the next quarterly meeting in September.
However, a break above the opening limit of 2021 indicates potential reversals in the broader trend as head-and-shoulder reversals begin to develop, and speculation about an imminent change in Fed policy could keep the USD / CAD afloat. central bank officials show greater willingness to reduce financial support.
As a result, a Federation symposium could provoke a bullish reaction US dollar if Federal Reserve officials put in place a potential exit strategy and Greenback could outperform its Canadian opponent, following the example of the Bank of Canada (BoC).now expects GDP growth of around 6 percent in 2021, slightly slower than expected in April. ”
USD / CAD, in turn, may rise before next BoC interest rate decision on 8 September as governor Tiff Macklem and Co. emphasize that “the recovery continues to require exceptional monetary support, but further exchange rate developments could contribute to the recent decline in retail sentiment as traders become short for the second time this year.
The IG customer feelings report shows 42.07% of traders are now net length USD / CAD where the trader relationship is short and long standing 1.38 to 1 p.m.
The number of traders in net length is 9.94% higher than yesterday and 41.83% lower than last week, while the number of traders in the short term is 8.51% higher than yesterday and 49.47% higher than last week. The decline in the net position will come when the USD / CAD prolongs the decline from highest level of the year (1.2949), while the jump in net short-term interest rates has contributed to a change in retail sentiment, as 65.48% of traders were a couple on 10 August.
That being said, pause above Highest in January (1,288) may continue show a change in the broader trend as the inversion of the head and shoulders begins to develop, but failed attempt to test December 2020 record (1.3009) may cause a larger backflow in USD / CAD as the Relative Strength Index (RSI) falls back from the overbought territory.
USD / CAD exchange rate daily schedule
Source: Trading View
- There seems to be a shift in the broader trend as USD / CAD cancels Highest in January (1,288)and the exchange rate may continue to trade at fresh annual highs as the head and shoulders begin to reverse.
- The key reversal pattern, which materialized as a 50-day SMA (1.2496), rose positively and exchange rate trading exceeded the 200-day SMA (1.2553) for the first time in a year as the relative strength index (RSI) pushed over the overbought territory over the same period.
- The textbook sales signal has emerged as the RSI falls back from the overbought territory and the USD / CAD may subsequently failed attempt to test December 2020 record (1.3009) when it slides back below the 1.2770 (38.2% expansion) range.
- In return, retreat from the fresh top of the year (1.2949) may be reversed in the direction of USD / CAD Fibonacci overlap 1.2620 (50% retracement) to 1.2650 (78.6% expansion), with the next area of interest arriving at about 1.2510 (78.6% retracement).
- It is necessary to close the overlap above about 1.2830 (38.2% retracement) to 1.2880 (61.8% expansion) to bring the 1.2980 (61.8% retracement) area back to the radar by moving Highest level in December 2020 (1,3009) Opening of 1.3030 (50% expansion) to 1.3040 (50% expansion).
– Written by David Song, currency strategist
Follow me on Twitter at @DavidJSong