USD/CAD Continues to Carve Bearish Formation Ahead of Canada CPI

Talking Points:

USD/CAD Continues to Carve Bearish Formation Ahead of Canada CPI.

USD/JPY Topside Targets Remain in Focus as Bullish Momentum Gathers Pace.

DailyFX

USD/CAD Daily

USD/CAD Daily Chart

Chart – Created Using Trading View

  • USD/CAD stands during risk for a incomparable pullback as it continues to carve a near-term array of reduce highs lows, while a Relative Strength Index (RSI) comes adult opposite trendline support; disaster to safety a bullish arrangement might eventually pull a dollar-loonie towards a reduce end of a descending channel arrangement generally as a oscillator reverses march forward of overbought territory.
  • Even yet a Bank of Canada (BoC) keeps a doorway open to serve embark on a easing-cycle, a new liberation in wanton oil prices accompanied by expectations for an uptick in Canada’s Consumer Price Index (CPI) might keep a loonie afloat over a entrance days and inspire Governor Stephen Poloz and Co. to safety a stream process for a foreseeable destiny generally as a executive bank ‘expects sum CPI acceleration to be tighten to 2 percent from early 2017 onwards.’
  • The near-term concentration stays slanted to a downside following a unsuccessful try to exam a Fibonacci overlie around 1.3630 (38.2% retracement) to 1.3660 (78.6% expansion), with a initial segment of seductiveness entrance in around 1.3460 (61.8% retracement) followed by 1.3300 (61.8% expansion) to 1.3310 (38.2% retracement).

USD/JPY Daily

USD/JPY Daily Chart

Chart – Created Using Trading View

  • With a USD/JPY dermatitis highlighting a change in marketplace behavior, a sell rate might continue to lane aloft over a residue of a month generally as a RSI pushes deeper into overbought territory; need a oscillator to tumble subsequent 70 (textbook sell-signal) to advise a near-term pullback is underway.
  • The dollar-yen might continue to retrace a decrease from progressing this year amid pickup in risk ardour interconnected with flourishing expectations for a Dec Fed rate-hike, though a uninformed projection due out during a subsequent quarterly assembly on Dec 14 might heavily impact a sell rate as marketplace courtesy turns to a 2017-rotation within a Federal Open Market Committee (FOMC), with Chicago Fed President Charles Evans, Philadelphia Fed President Patrick Harker, Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari fasten a permanent-voting members.
  • Broader opinion for USD/JPY is apropos increasingly constructive as cost RSI mangle out of a long-term bearish trends, with a subsequent topside aim entrance in around 110.20 (50% retracement) followed by a May high (111.45).

DailyFX SSI

  • The DailyFX Speculative Sentiment Index (SSI) shows a sell throng is net-short USD/JPY for a initial time given Jul 20 after attack a 2016-extreme of +6.04 in September, while traders have been net-short USD/CAD given Oct 20.
  • USD/JPY SSI sits during -1.54 as 39% of traders are long, with brief positions 43.6% aloft from a prior week as open seductiveness stands 13.2% above a monthly average.
  • USD/CAD SSI sits during -1.26 as 44% of traders are long, with prolonged positions 47.4% aloft from a prior week, while open seductiveness stands 5.9% above a monthly average.
  • May see a USD/JPY SSI pull deeper into disastrous domain on a serve allege in sell rate as a sell throng tries to locate a near-term top.

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Read More:

US Dollar Whiplash Ends with a Trump Bump

GBP/JPY Technical Analysis: New Trend in Play after 800-Pip, 3-Day Romp

USD/CAD Technical Analysis: Pending Trade Talks U.S. Inflation Weakens CAD

SP 500 – Bears Got Trumpled, Short-term Trading Levels Noted

— Written by David Song, Currency Analyst

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