BoC on Deck as USD/CAD Tests Support; EUR/USD Tries to Find a Low

Talking Points:

– The Bank of Canada hosts a rate preference during 10 AM ET today, and there are minimal expectations for any tangible moves during today’s meeting. More engaging will be a bank’s tinge towards rate hikes in a early apportionment of subsequent year.

– The U.S. Dollar stays in a rather pale space, and we looked during setups around this thesis in yesterday’s webinar entitled, Dollar Range Poised to Give Way with NFP, FOMC in Sight.

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The inflection of today’s mercantile calendar comes in rather early, as a Bank of Canada rate preference is on a calendar for 10 AM ET. My co-worker Christopher Vecchio discussed this rate preference progressing this morning, and expectations are really low for any moves during today’s meeting, now display sub-20%. Those contingency start to tick-higher as we pierce into 2018, however, and a some-more hawkish BoC matter could re-trigger a run of strength that has been seen in a Canadian Dollar for most of this year.

When a BoC started warning of rate hikes in May, CAD strength began to uncover after what had been a sincerely diseased before 12 months. As a BoC ushered in that initial travel in over 9 years, USD/CAD pennyless next a bullish channel that had hold a span for most of a before year. This led to a run of 4 months, from May to Sep that saw USD/CAD tumble from above 1.3800 down to only above 1.2000. That low in Sep was set after a BoC’s second rate hike.

USD/CAD Daily: Major Trend Shift Driven by BoC’s Hawkish Twist

BoC on Deck as USD/CAD Tests Support; EUR/USD Tries to Find a Low

Chart prepared by James Stanley

Since that second rate travel in September, USD/CAD has continued to digest before waste while expectations have been removing a bit some-more pacifist around a BoC, heading us into now with a minimal expectations for any near-term hikes. But – as USD debility has started to uncover with a bit some-more inflection or, maybe some-more accurately, a miss of strength in a U.S. Dollar; USD/CAD has built-in to a range, as shown next in a gray box. Support for this operation has shown around 1.2600, that syncs adult with a set of before pitch highs from September/October.

If we do see a postulated downside mangle next this section as instituted by today’s BoC announcement, a doorway can be non-stop for short-side delay in a pair.

USD/CAD Four-Hour: Range-Bound Past Month+, Support Test Ahead of BoC

BoC on Deck as USD/CAD Tests Support; EUR/USD Tries to Find a Low

Chart prepared by James Stanley

USD Testing Short-Term Resistance Ahead of NFP

The U.S. Dollar has been rather still of recent, spending a past integrate of weeks bouncing between 92.50 and 93.50. This leaves us in a rather pale mark on longer-term charts, as cost movement continues to find insurgency around before support while also building in near-term higher-lows. This can give us a form of descending crowd formation, that could concede traders to pierce towards this overload with a semi-bullish bias.

BoC on Deck as USD/CAD Tests Support; EUR/USD Tries to Find a Low

Chart prepared by James Stanley

EUR/USD Retracement Continues – Support during Trend-Line Projection

We’ve been following an area of before swing-highs in EUR/USD in a bid of identifying higher-low support in a pair. That support hold final week, even charity a morning star arrangement on a Daily chart. But bulls were incompetent to continue a move, and prices have continued to lift behind towards a ‘big’ section of support that runs from 1.1685-1.1736.

We’ve also seen support starting to uncover in another area, and this is taken from a trend-line projection that can be found by joining a Sep 20 high to a Nov 15th high, that was a sharpened star arrangement that showed adult on a daily EUR/USD chart. We popped behind above that trend-line dual weeks ago and over a past week, a shifting scale of support has shown on a other side of a projection of that trend-line.

EUR/USD Daily: Sliding Scale of Support on Projection of Prior Trend-Line

BoC on Deck as USD/CAD Tests Support; EUR/USD Tries to Find a Low

Chart prepared by James Stanley

— Written by James Stanley, Strategist for DailyFX.com

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