USD/CAD, CAD/JPY in Spotlight Today

Talking Points

– USD/CAD unsuccessful to mangle a new pitch high in a intensity bullish descending wedge.

– CAD/JPY is possibly figure out a longhorn dwindle or a tip between 84.80/88.92.

– ‘Plan a trade, trade a plan’: join me on Monday during 7:30 EST/12:30 GMT for a FX Week Ahead webinar to strategize trades around a tip eventuality risk for a entrance week.

With a US Dollar (via DXY Index) starting to trip again, one’s evident desire is to demeanour for an answer. While a FOMC mins weren’t as hawkish as marketplace participants were expecting, it’s critical to give them some context: a Jan US Nonfarm Payrolls news (February 3) and a Jan US CPI news (February 8) were both expelled after a Fed’s initial assembly of a year.

Why does that matter? In a FOMC minutes, it was settled that “the Committee will consider satisfied and approaching mercantile conditions relations to a objectives of limit practice and 2 percent inflation.” If we have a checklist during home, put outlines subsequent to both of these equipment – we’ve really seen serve progress.

Likewise, with Fed policymakers ceaselessly hammering home a thought that a Mar rate travel is on a table, some-more justification that a labor marketplace and acceleration are heating adult serve could be adequate to tip a beam into a sooner-than-currently-priced rate travel (February US Nonfarm Payrolls will be expelled Mar 10; Feb US CPI will be expelled Mar 17, dual days after a Fed meets). We might not get a travel in March; though a contingency of a travel in May, off of a quarterly SEP/press discussion cycle, are increasing.

Chart 1: Crude Oil Daily Timeframe (April 2016 to Feb 2017)

USD/CAD, CAD/JPY in Spotlight Today - Watch Crude Oil Prices

Elsewhere, as a DXY Index goes by a digestion, courtesy should be on CAD-crosses currently with a arriving Feb Canadian CPI news due. You can review a preview here (at a bottom). Crude Oil prices continue to float nearby their top levels of a year, though until we see a concrete mangle of a stream descending triangle, afterwards a bearish pivotal annulment from a initial trade day of 2017 stays valid.

Chart 2: USD/CAD Daily Timeframe (August 2016 to Feb 2017)

USD/CAD, CAD/JPY in Spotlight Today - Watch Crude Oil Prices

USD/CAD is by no means a transparent design right now, nonetheless with a building underneath Fed rate expectations for during slightest dual hikes this year, dips into 1.3000 seem to be shopping opportunities. The bullish descending crowd unfolding stays valid, though usually if we’re means to transparent 1.3212, a pitch high from Feb 7. This week, cost was usually means to grasp 1.3210 – still no mangle only yet.

See a above video for technical considerations in DXY Index, AUD/USD, EUR/USD, USD/CAD, AUD/JPY, CAD/JPY and Crude Oil.

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— Written by Christopher Vecchio, Senior Currency Strategist

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