– USD/CAD Slips to Fresh Monthly Low as Canada Retail Sales Jump 2.2%; RSI Flashes Bearish Signal.
– USD/JPY Extends Bearish Series Ahead of BoJ Minutes; Approaches 111.60 Support Zone.
Chart – Created Using Trading View
- USD/CAD pares a miscarry from progressing this week, with a span slipping to a uninformed monthly low of 1.3264 as Canada Retail Sales exceeds marketplace foresee and jumps 2.2% in January; a tighten subsequent a Fibonacci overlie around 1.3290 (50% retracement) to 1.3310 (38.2% retracement) raises a risk for a serve decrease in a sell rate generally as former-trendline support on a Relative Strength Index (RSI) appears to be charity resistance.
- The pickup in domicile expenditure accompanied by a ongoing enlargement in a labor market might put vigour on a Bank of Canada (BoC) lift a benchmark seductiveness rate off of a record-low, yet a Consumer Price Index (CPI) might tame seductiveness rate expectations as a title reading for acceleration is approaching to reason solid an annualized 2.1% in February; in turn, Governor Stephen Poloz might continue to validate a wait-and-see proceed during a subsequent assembly on Apr 12 as ‘subdued expansion in salary and hours worked continue to simulate determined mercantile tardy in Canada.’
- Moreover, a second-tier information prints entrance out of a U.S. might destroy to column adult on a dollar as a Federal Open Market Committee (FOM) is widely approaching to keep a stream process during a subsequent seductiveness rate preference on May 3, yet Fed Fund Futures might continue to prominence expectations for a pierce in Jun as Chair Janet Yellen and Co. continue to plan 3 to 4 rate-hikes for 2017.
- Indeed, a broader opinion for USD/CAD stays constructive as a span continues to work within a ceiling trending channel carried over from 2016, yet a tighten subsequent the Fibonacci overlie around 1.3290 (50% retracement) to 1.3310 (38.2% retracement) might open adult a subsequent downside aim around 1.3210 (61.8% retracement) followed by a 1.3100 (78.6% retracement) handle.
Chart – Created Using Trading View
- USD/JPY appears to be operative a approach towards a Feb low (111.69) as it extends a array of reduce highs lows from a prior week, yet another unsuccessful try to mangle a Fibonacci overlie around 111.30 (50% retracement) to 111.60 (38.2% retracement) might furnish range-bound conditions forward of Japan’s 2016 mercantile year-end; will keep a tighten eye on a RSI as it comes adult opposite a bullish trend carried over from a prior year.
- The Bank of Japan (BoJ) Minutes might beget a singular marketplace greeting as a executive bank sticks to a Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control, yet Governor Haruhiko Kuroda and Co. might keep a doorway open to serve support a genuine economy as they onslaught to grasp a 2% aim for inflation.
- Nevertheless, a new appreciation in a Japanese Yen appears to be accompanied by a converging in risk ardour as a Nikkei (JPN225) highlights a identical energetic and continues to pullback from a uninformed 2017-high (19,704), and marketplace view might continue to change a dollar-yen sell rate over a near-term as marketplace participants coddle a devious paths for financial policy.
- A tighten subsequent a Fibonacci overlie around 112.40 (61.8% retracement) to 112.50 (38.2% retracement) raises a risk for another exam of a near-term support section around 111.30 (50% retracement) to 111.60 (38.2% retracement).
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- The DailyFX Speculative Sentiment Index (SSI) shows a sell throng has been net-short USD/CAD given Feb 28, while traders stays net-long USD/JPY given Jan 9.
- Retail merchant information shows 38.8% of traders are net-long with a ratio of traders brief to prolonged during 1.58 to 1. The series of traders net-long is 1.7% reduce than yesterday and 31.4% reduce from final week, while a series of traders net-short is 5.0% aloft than yesterday and 20.5% reduce from final week.
- Retail merchant information shows 72.2% of traders are net-long with a ratio of traders prolonged to brief during 2.6 to 1.he series of traders net-long is 5.1% reduce than yesterday and 5.9% reduce from final week, while a series of traders net-short is 0.2% aloft than yesterday and 27.3% reduce from final week.
- Seems as yet sell seductiveness has narrowed neatly from a prior week, and this energetic might continue to take figure over a entrance days on a behind of month/quarter-end flows.
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— Written by David Song, Currency Analyst
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