USD/CAD Snaps Back on Hawkish Yellen; Bearish Series during Risk

Talking Points:

USD/CAD Snaps Back Following Hawkish Yellen Testimony; Bearish Series during Risk.

GBP/USD Struggles as U.K. CPI Disappoints; Weak Job/Wage Growth to Spur Further Losses.

DailyFX Table


USD/CAD Daily Chart

Chart – Created Using Trading View

  • USD/CAD snapped behind from a low of 1.3025 as Fed Chair Janet Yellen warned it ‘would be unwise’ to serve check a normalization cycle during a Humphrey-Hawkins Testimony and argued a serve composition would be indispensable as prolonged as a economy stays on it stream course; might see a dollar-loonie theatre a incomparable liberation over a entrance days as it appears to be responding to channel support, while a Relative Strength Index (RSI) mostly maintaining a bullish arrangement carried over from 2014.
  • The U.S. Consumer Price Index (CPI) on daub for Wednesday morning might worsen a seductiveness of a greenback as a title reading for acceleration is approaching to allege an annualized 2.4% following a 2.1% enlargement in December, though a slack in a core rate of acceleration might beget a churned marketplace greeting and tame seductiveness rate expectations as Fed Fund Futures continue to cost a larger than 80% luck a Federal Open Market Committee (FOMC) will keep a stream process during a subsequent quarterly assembly in March.
  • With a FOMC still widely expected to lift a benchmark seductiveness rate in June, a broader opinion for USD/CAD stays constructive, with a tighten above 1.3100 (78.6% retracement) lifting a risk for a pierce behind towards a Feb high (1.3212) that lines adult with a subsequent topside area of seductiveness entrance in around 1.3210 (61.8% retracement).


GBP/USD Daily Chart

Chart – Created Using Trading View

  • After outperforming a vital counterparts to start a week, a British Pound struggles to reason a belligerent as a Consumer Price Index (CPI) fails to accommodate marketplace expectations, with argent during risk of confronting additional headwinds over a subsequent 24-hours of trade as U.K. Jobless Claims are projected to corner aloft in January, while Average Hourly Earnings are expected to reason solid during an annualized 2.8% in December; might see GBP/USD continue to connect and lane a late-2016 operation generally forward of a EU-Referendum deadline scheduled for a finish of March.
  • Signs of weaker-than-expected cost enlargement might inspire a Bank of England (BoE) to safety a prominence accommodative process position during a subsequent seductiveness rate preference on Mar 16, though a serve debasement in a British Pound sell rate might pull a executive bank to gradually pierce divided from a easing-cycle as officials advise ‘a effect of weaker argent is that a aloft alien costs ensuing from it will boost consumer prices and means acceleration to mistake a 2% target.
  • Failure to transparent a Fibonacci overlie around 1.2630 (23.6% retracement) to 1.2680 (50% retracement) raises a risk for a pierce behind towards a reduce finish of a British Pound ‘flash crash’ range, with a break/close subsequent 1.2370 (50% expansion) opening adult a subsequent downside aim around 1.2270 (23.6% retracement).

For More Updates, Join DailyFX Currency Analyst David Song for LIVE Analysis!

Click HERE for a Entire DailyFX Webinar schedule.

DailyFX Calendar

Click Here for a DailyFX Calendar

If you’re looking for trade ideas, check out the Trading Guides.

Read More:

Brexit Briefing: Pound Dithers as Consumer Spending Cools, But Rate Hike Hopes are Shifting

SP 500: Testing Bottom-side of Familiar Trend-line

Crude Oil Price Forecast: Possibly The Most Encouraging Move of 2017

Gold Prices Vulnerable into Feb Open- Outlook Constructive Above 1200

— Written by David Song, Currency Analyst

To hit David, e-mail Follow me on Twitter during @DavidJSong.

To be combined to David’s e-mail placement list, greatfully follow this link.

About author