Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.
USD/CAD: outlook for September 4-8
2019-11-11 • Updated
Canadian dollar keeps making impressive gains versus its US counterpart. USD/CAD made an attempt to recover, but was severely rejected down from 1.2660 and fell to the lowest levels in more than 2 years.
The pair was hit both by the US problems and Canada’s bright economic figures. The CAD strengthened even as oil prices slipped in the wake of Hurricane Harvey, which has paralyzed a quarter of the US refining industry. A report released on Thursday showed that Canadian GDP grew at 4.5% annual pace in the second quarter, at the fastest pace since 2011. In addition, Mexican Economy Minister said on Thursday that Mexico and Canada would remain in the North American Free Trade Agreement even if the US administration abandoned the accord.
Traders are now almost sure that the Bank of Canada will raise its benchmark interest rate this year. Some players are even expecting a rate hike as soon as at the upcoming meeting on Wednesday, September 6. Such possibility is estimated at 30%. The likelihood of a rate hike in 2017, in general, is estimated at 85%.
Canadians will celebrate the Labor Day on Monday, and banks both in Canada and the US will be closed. Other days of the week will be packed with important events for CAD. Economic data releases include trade balance, building permits, Ivey PMI and employment figures.
USD/CAD remains in a downtrend. This trend will likely continue. A weekly close below 200-week MA at 1.2430 will be a bearish sign. Next support levels are at 1.2300 and 1.2200. MACD divergence on the daily chart may allow some correction to the upside. Resistance is at 1.2430 and 1.2550.
USD/CAD continues dipping. Follow US jobless claims and the speech of Fed’s Powell!
The mix of economic reports from Canada and the USA will have a huge impact on the pair! Get ready with us!
For those who may be unfamiliar with Price Action trading, the horizontal arrows represent areas where the market structure was broken. As you can see in the scenario above, price broke below the previous low at the two marked instances
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.