Yesterday the data on growing February CPI were released in the US. In theory, it points to increased likelihood of interest rate hike, so the dollar stopped falling. However we do not rule out the downtrend and would like to draw your attention to the USD/CAD currency pair. Canadian GDP (YoY) in the forth quarter rose 2.4 as core CPI increased 0.6%. US Gross Domestic Product (Q4) will be released on Friday, analysts forecast 2.4% growth. According to yesterday's report, American CPI added 0.2% in February which is that that much, compared to Canada. Taking into account interest rates (0.25% in the US and 0.75% in Canada) we assume that the Canadian dollar may strengthen. To be mentioned, no important macroeconomic releases are expected in Canada. We believe that USD/CAD dynamics will determined by the news from the US.
USD/CAD has been traded in a range for 2 months on the D1 chart. Now it has moved to its lower boundary, traced by support line together with Parabolic and Donchian Channel. RSI bars indicates the bearish divergence: it is located below 50. USD/CAD deviated upward from the moving average. We do not rule out further bearish momentum if Doncian support and fractal low are breached at 1.2387: a sell pending order may be placed here. Stop loss may be placed below the average line between Donchian Channel and the local fractal low, which currently acts as support line - 1.2564. After pending order placing, Stop loss is to be moved every four hours near the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend cancelling the position: market sustains internal changes which were not considered.
- Position Sell
- Sell stop below 1,2387
- Stop loss above 1,2564
Recommended Content
Editors’ Picks
AUD/USD stays directed toward 0.6500 as RBA's Bullock speaks
AUD/USD is extending losses toward 0.6500 in Asian trading on Tuesday. The Aussie Dollar remains offered after the Reserve Bank of Australia extended the pause. Markets digest the less hawkish policy statement while Governor Bullock's press conference gets underway.
USD/JPY holds gains below 150.00 on the expected BoJ rate hike
USD/JPY holds gains below 150.00, as the Japanese Yen stays vulnerable amid a classic 'sell the fact' trading on the hawkish BoJ decision. The BoJ lifted the interest rate by 10 basis points (bps) from -0.1% to 0% for the first time since 2007 and abandoned the YCC framework.
Gold price flat-lines above one-week low, awaits the crucial Fed decision on Wednesday
Gold price oscillates in a range and is influenced by a combination of diverging forces. Hawkish Fed expectations, elevated US bond yields and a bullish USD cap the upside. Geopolitical risks lend some support to the XAU/USD ahead of the key FOMC meeting.
Bitcoin price shows weakness, but new BTC whales have created solid support at $56,400
Bitcoin price downside momentum continues to gain strength, giving sidelined and late bulls a chance to buy the dip. The market remains focussed on the oncoming halving, expected to kick off the next bull cycle. For the meantime, however, spot BTC ETFs remain the main play in the market.
Lots of tension ahead of this week's Fed decision
Last week, we got a strong round of US economic data accompanied by hotter US inflation reads. The takeaway of course is that there might be a lot more pressure on the Fed to be looking to scale back its rate cut outlook at this week’s meeting.