The US dollar index rose to 105.40 after the Fed’s 75-basis-point key rate hike, while the stock and the crypto markets fell. However, during the past few days, investors and traders returned to risk assets as they expect inflation growth to slow. Moreover, Jerome Powell, the head of the Federal Reserve, announced the Fed might start cutting the key rate by 2024, which is the most evident hint of an upcoming market reversal.
Canadian CPI, Top-down Analysis and Trade Ideas
2022-09-21 • Updated
The Consumer Price Index announcement by Statistics Canada is set for release in a short while and will uncover the state of inflation in the Canadian economy. Although the CPI data for last month indicated a decline in inflation rates, analysts are concerned the data for this month could very easily surpass the previous month's. It is also noteworthy that the BOC has had higher rate hikes than the Fed in recent months. The following are a compilation of interesting ideas to consider.
On the Daily Timeframe, we can see EURCAD retesting the upper limit of a descending channel. There is also a confluence with the 50% Fibonacci level.
The 4H timeframe also shows that price is being rejected off the top of the upper limit of an ascending wedge, thus providing clearer confirmations of a bearish movement.
CADCHF has been rejected off the internal Trendline, which serves as support alongside the 76.4% Fibonacci level. The factors seem to favor a bullish Price Action.
On the 1-Hour timeframe, we see a trading range with high chances of a breakout. The breakout will signal further confirmation of the bullish bias.
AUDCAD seems to be reeling under selling pressure from the 50% Fibonacci level coupled with the upper limit of the descending channel.
On the 4-Hour timeframe, we also see the possibility of price breaking lower out of the rising wedge.
USDCAD is expected to experience some selling pressure based on the confluence of the resistance from September 2020 high and the upper boundary of a rising wedge.
To trade any of these ideas, understand your risk exposure and observe due diligence to confirm the setups based on your preferred trading strategy. Sign-up or log in to your FBS account to get started.
Recently, the Bank of Canada hiked the interest rates by 50 basis points. It is now 1.5%, and it’s only the beginning.
Last week, EURUSD broke below a significant support level, the gas price retested its October high, and the oil prices managed to correct lower on the bearish signs of more oil supplies coming into the market.
Let's start off with a look at the Daily timeframe on Bitcoin. We currently see price reacting to the rally-base-rally demand zone between the 15,600 - 14,300 price area. Price also seems to have found support off the trendline support as marked in the image above. Interestingly, this means the overall bias on BTCUSD is Bullish.
Central Bank Digital Currencies (CBDCs) are virtual national money. The idea of creating such currencies came to the authorities after the success of cryptocurrencies, which also exist only in digital form.
The views here are solely based on Technical Analysis techniques using my personal Smart Money approach. Hence, it is important to understand that the trading of CFDs comes at a risk; if not properly managed, you may lose all of your trading capital. To avoid costly mistakes while you look to trade these opportunities, be sure to do your own due diligence and manage your risk appropriately.