There is a huge agiotage around today’s FOMC meeting…
USD/CAD: outlook for September 4-8
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.
The Bank of Canada will announce the interest rate tomorrow (March 7 at 17:00 MT time)…
Italian parliamentary elections and German coalition votes started to affect the euro much earlier they were held…
We've got a bearish "High Wave", which has strong confirmation. In this case, the price is likely going to decline.
Growing concerns over Greek bailout, early elections in Italy and comments by the ECB President Mario Draghi about the need to maintain the bank’s extraordinary amount of monetary policy support…
The 144 Moving Average has acted as support, but there's a bearish "Engulfing' at the local high.