Fundamental Forecast for Canadian Dollar: Bullish
The Bank of Canada’s final seductiveness rate preference for 2017 might hint serve waste in USD/CAD should a executive strike a hawkish opinion for financial policy.
Even yet a BoC is mostly approaching to keep a benchmark seductiveness rate during 1.00% on Dec 6, Governor Stephen Poloz and Co. might ready Canadian households and businesses for aloft borrowing-costs as a economy adds another 79.5K jobs in November.
With a Unemployment Rate squeezing to an annualized 5.9%, the lowest reading given 2008, a BoC might stress that ‘less financial process impulse will approaching be compulsory over time’ after delivering dual uninterrupted rate-hikes in 2017. In turn, a executive bank might follow a identical trail in 2018 as ‘inflation is approaching to boost to tighten to 2 per cent over a subsequent several quarters,’ and USD/CAD might vaunt some-more bearish function going into 2018 as a certain developments entrance out of a Canadian economy puts vigour on a BoC to serve normalize financial policy.
Keep in mind, a U.S. Non-Farm Payrolls (NFP) news might also impact a near-term opinion for USD/CAD, with practice projected boost 200K in November, while a sign for Average Hourly Earnings is approaching to miscarry to an annualized 2.7% from 2.4% the month prior. However, another array of churned U.S. information prints might quell a fuel a near-term debility in USD/CAD as it encourages Federal Reserve officials to trim a longer-run foresee for a benchmark seductiveness rate.
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USD/CAD Daily Chart
USD/CAD might connect forward of a pivotal eventuality risks lined adult for a initial full week of Dec as it retains a range-bound cost movement carried over from a prior month, though a pair faces a flourishing risk of giving behind a miscarry from a 2017-low (1.2061) as a bear-flag appears to be holding shape, with a near-term opinion capped by a former-support section around 1.2980 (61.8% retracement) to 1.3030 (50% expansion).
In light of new cost action, the Relative Strength Index (RSI) warrants courtesy as it pulls behind forward of overbought domain and approaches trendline support. Failure to keep a bullish arrangement from Aug might prominence a change in USD/CAD behavior, with a mangle of a November-low (1.2670) opening adult a 1.2620 (50% retracement) hurdle, that sits next a 50-Day SMA (1.2654).
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