USD/CAD Marches to Monthly Highs Ahead of BoC

Talking Points:

– Tomorrow brings a Bank of Canada’s rate decision, and a day after brings a pivotal assembly with a European Central Bank.

– USD-strength continues to show, and a re-test of a pivotal section of insurgency appears expected as we demeanour during a rather full calendar for a residue of this week. US GDP is on Friday.

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Tomorrow brings a Bank of Canada rate decision, and this brings some light to what had been one of a strongest USD-trends in 2017. When a Bank of Canada hiked seductiveness rates for a initial time in over 7 years in July, a Canadian Dollar gathering on a spate of strength that lasted for a subsequent dual months. As we came into September, that unequivocally clever Canadian Dollar hold another breeze of strength as a bank put in another rate hike, and a few days after we were sitting during uninformed two-year lows in USD/CAD.

But given afterwards we’ve seen sellers take over in CAD as USD/CAD has continued to run-higher in a rather unchanging format, producing a bear dwindle arrangement as we demeanour during in blue on a next chart.

USD/CAD Four-Hour: Bear Flag After Sep Post-Rate Hike Low

USD/CAD Marches to Monthly Highs Ahead of BoC

Chart prepared by James Stanley

At this stage, we’re saying insurgency uncover only a small forward of a longer-term Fibonacci level, a 38.2% retracement of a 2014-2016 vital pierce in a pair, and this comes after buyers had showed-up only forward of a 50% Fib retracement of that same pierce progressing in September. This new retracement has also enclosed a break-above what was formerly a pivotal trend-line in a pair.

USD/CAD Weekly: Retracement Post-Rate Hike Breaks-Above Key Trend-Line

USD/CAD Marches to Monthly Highs Ahead of BoC

Chart prepared by James Stanley

The large doubt around USD/CAD is possibly sellers come behind or possibly they’ll take a behind chair as a bigger design thesis of USD-strength continues. On a four-hour draft below, we’ve practical 3 insurgency levels above and 4 support levels next stream cost movement so that traders can serve weigh this thesis by tomorrow’s rate hike. If we do see an ceiling advance, traders can demeanour for insurgency to set-in during possibly of a 3 practical levels, during that indicate looking to a before turn for a pullback in a bid of throwing ‘higher-low’ support.

USD/CAD Four-Hour: Support and Resistance Applied

USD/CAD Marches to Monthly Highs Ahead of BoC

Chart prepared by James Stanley

EUR/USD Remains Near Support Ahead of ECB

The day after tomorrow brings another rate decision, and this one can lift some sincerely clever repercussions around tellurian markets. The far-reaching expectancy is that we’ll hear a ECB start to scale behind their impulse outlays, though a large doubt is by how most and for how prolonged they competence demeanour to extend a program.

Two days forward of a rate preference has EUR/USD remaining nearby a long-term section of support that we’ve been following that runs from 1.1685-1.1736. Yesterday brought another exam of a top-side of that section that has, during slightest so far, hold up.

But given a miss of a continued bullish response after buyers responded to support, Euro bulls would expected wish to be discreet here, as we can simply see a deeper support exam on a short-term draft while longer-term charts sojourn constructively bullish.

EUR/USD Four-Hour: Long-Term Support Continues to Hold, ST Price Action Not Yet Bullish

USD/CAD Marches to Monthly Highs Ahead of BoC

Chart prepared by James Stanley

Dollar Resiliency Highlights Likely Re-Test of Resistance Zone

While USD-strength has begun to uncover with a bit some-more consistently in USD/CAD and EUR/USD, a awaiting of a bullish delay pierce in a Greenback has started to demeanour a bit some-more likely. But – we’re still not out of a woods yet, as that firm area of insurgency that’s hold a highs in USD given Jul stays unfettered. This section runs from 94.08-94.30, and this area has helped to turn-around bullish advances in Aug and again in early-October around a Non-Farm Payrolls news progressing in a month.

U.S. Dollar around ‘DXY’ Daily: Fast-Approaching Key Zone of Resistance

USD/CAD Marches to Monthly Highs Ahead of BoC

Chart prepared by James Stanley

Friday of this week brings U.S. GDP and this can positively poke some sensitivity into USD; though we substantially won’t have to wait that long, as a Euro-heavy DXY will expected sojourn on a pierce around a Euro’s dynamics emanating from Thursday’s ECB rate decision. If we do see a top-side mangle of this section of resistance, targets are non-stop adult during 95.50, 96.50 and afterwards 97.75.

We looked during a integrate of pairs only final week that could be appealing underneath such a strategy, with importance on USD/JPY and AUD/USD to demeanour for a delay of USD-strength.

USD/JPY stays nearby insurgency after a clever weekend-pop around Japanese elections. We looked into this span in yesterday’s article. On a side of AUD/USD, a span has continued to uncover bearish tendencies on shorter-term charts, and we discussed those yesterday in a Analyst Pick entitled, AUD/USD Under Pressure as USD Strength Continues.

AUD/USD Four-Hour: Lower-Lows, Highs Highlight Bearish Potential on Short-Term Charts

USD/CAD Marches to Monthly Highs Ahead of BoC

Chart prepared by James Stanley

— Written by James Stanley, Strategist for DailyFX.com

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