The beginning of the month was quite eventful for the Turkish lira. However, this week it started to lose its volatility. What is happening?
USD/CAD daily outlook
The sentiment surrounding the Loonie has turned bullish last week due to the recent hawkish BoC’s rhetoric. The Bank of Canada Governor Stephen Poloz and his deputy Carolyn Wilkins made it clear – a rate hike is imminent, if not in the July 12 meeting, then in September. Worries over the housing market and subdued inflation rates might temper the central bank’s willingness to act promptly. Raw material and industrial prices released last Friday dropped lower indicating the absence of inflation; CPI figures were lower than expected (0.1% against forecasted 0.2%).
The currency’s correlation to oil prices is becoming weaker. On the heels of the BoC’s comments, the Canadian dollar didn’t stop strengthening despite the declining oil prices. Today we saw a modest pick-up in the US dollar against the CAD despite the surging oil prices. So, we suggest the CAD will be driven predominantly by the economic releases and the BOC officials’ comments in the upcoming future. The next economic indicators will be published at 4:30 pm on Thursday – trade balance data and building permits. On Friday, we will get a package of labor data out of Canada and the US. If the US data beat market’s expectation on the back of disappointing release of the Canadian employment indicators, the USD/CAD will rise higher.
The current technical outlook is neutral. USD/CAD trades at 1.2975. On a sustained recovery back above the 1.3000 handle, a fresh bout of buying could lift the pair towards 1.3070/1.3100 resistance area. On the downside, 1.2965 level may serve as immediate support, which if broken would send the pair to 1.2945/1.2930 levels.
The last "Pennant" pattern has been broken, so bulls found resistance at 1.2915. Nevertheless, the market is likely going to move on, so we should...
USD/CHF remains weak across the board and stays strong with a bearish consolidation below the 200 SMA at H1 chart…
There's no any reversal pattern so far, so the market is likely going to test the nearest resistance area in the short term...