USD/CAD resistance in view

Aaron Hill FP Markets

Headline and core inflation jumps

Underpinned on higher gasoline prices, headline inflation jumped to 4.0% in the twelve months to August, up from 3.3% in July and a touch north of economists estimates at 3.8%. From July to August, inflation climbed 0.4%, versus 0.3% expected but lower than July’s 0.6% print. Core inflation rose 3.3% in the twelve months to August, up from 3.2% in July, but lower than the 3.5% expected, while on a month-on-month basis, core inflation eased to 0.1%, down from 0.5%.

Rates markets are still leaning towards a no-change at the next meeting for the Bank of Canada (BoC), though the odds for a rate hike certainly increased and now stand at around a 43% chance of a 25bp push. Nevertheless, with the unemployment rate increasing since May and economic growth showing signs of slowing, a rate hike is still unlikely.

Daily resistance at CAD1.3414, anyone?

Following today’s inflation numbers out of Canada, the USD/CAD currency pair spiked to a session low of CAD1.3379 and technically opened the door to daily resistance at CAD1.3414. What’s technically interesting is that beneath the aforementioned resistance, the unit has room to aim as far south as daily support at CAD1.3304.

With this in mind, on the M5 timeframe, short-term analysis shines a light on a possible AB=CD resistance approach to the underside of the current daily resistance at CAD1.3416 (depicted by way of a 100% projection ratio). Complementing the aforesaid AB=CD pattern is a 50.0% retracement ratio at CAD1.3419. Another key technical observation is the currency pair is testing space just above the big figure CAD1.34, thus echoing a stop-run vibe, which could see sellers make a show from the daily resistance to take advantage of any buy stops above CAD1.34.

Author

Aaron Hill

FP Markets

After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.