USDCAD, Daily              

Two key Canadian data points both miss expectations data. Canada retail sales slipped 0.1% in July, contrary to expectations (median +0.2%) and following the 0.1% dip in June. The ex-autos sales aggregate dipped 0.1% in July, also not as expected (median +0.4%) after the revised 0.6% tumble in June (was -0.8%). Excluding gasoline prices, retail sales values grew 0.2% in July. Moreover, falling prices in general were a key driver during July for total sales values, as total sales volumes expanded 0.3% m/m in July. The improvement in actual sales (as opposed to the dollar value of those sales) is consistent with a projection for a 0.2% m/m gain in July GDP after the 0.6% surge in June. The separate real Q3 GDP measure is on track for a 3.2% rebound following the 1.6% drop in Q2.

Also Canadian CPI slowed to a 1.1% y/y rate in August, which was much slower than anticipated (median +1.4%) after expanding at a 1.3% clip in July. Total CPI fell 0.2% m/m in August (median +0.1%) following the matching 0.2% drop in July. The Bank of Canada’s core CPI measure slowed to a 1.8% y/y pace in August (median +2.1%) from the 2.1% y/y growth rate in July. The core CPI was flat in August, matching the flat reading in July.

USDCAD spiked up to 1.3140 highs from 1.3035 following the cooler Canada CPI and softer retail sales outcome. Firmed oil prices weighed on the pairing, though the weaker data more than unwound those CAD gains.

Chief Market Analyst

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USDCAD, Daily              

USDCAD is down for a third consecutive day, this time making 11-day lows under 1.2900. The pair has been hit by two things, one being Friday’s post-U.S. jobs report losses, which has eroded Fed tightening expectations, and the other being a rally in oil prices. News that Russia and Saudi Arabia had signed an agreement to set up a “working group” to think of ways to curtail crude market volatility boosted oil prices. The drop in USDCAD since Friday has breached below both the 20- and 50-day moving averages, at 1.2956 and 1.3010, respectively, which now revert as resistance markers. The pair remains without bigger-picture direction, having continued to trade in a broadly sideways manner since March. Focus this week will fall on Wednesday’s BoC policy meeting and Friday’s Canadian August employment report, which we don’t expect will upset prevailing USDCAD sentiment.

The breach and break of the 20 DMA yesterday triggered our SHORT position at 1.2930 near term Target 1 at 1.2875 and Target 2 below the recent 23.6 Fibonacci level and set at the two week ATR 1.2835. Further down support arrives at the August low 1.2770 and the June low at 1.2690.

Janne Muta

Chief Market Analyst

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USDCAD, 240 min

I wrote on USDCAD yesterday saying that it had created a daily shooting star in Wednesday’s trading and said that I expected the pair to break below the support. The idea was to look for sell signals after rallies if price breaks below 1.2940.My targets were: 1.2905 (T1) and 1.2860 (T2). The pair broke below the support and provided a sell signal near 1.2940 as it rallied back to the level. This lead the market lower well beyond my target one and all the way to 1.2876 before it rallied massively on the back of EIA oil reserve report causing the price of WTI crude to drop by over three dollars from $48 to $44.90. The report rekindled bearish supply-demand imbalance concerns. Crude is now trading just below the $45.60 – $45.80 area that used to support price and is worth keeping an eye on. Oil looks technically bearish with next minor support in crude is at $44.76 while the next daily support area can be found at $42.50 – $43.00. This should support USDCAD and provide further push higher in the pair.

Even though the USDCAD is trading now near the upper daily Bollinger Bands the two higher highs in the daily chart from July 4^th and yesterday (together with price of oil being bearish) are indicating the price has upside momentum and could mean that the pair pushes higher towards the June 27^th highs at 1.3120. The nearest minor support can be found around 1.3000 (next at 1.2985) while nearest minor resistance levels in USDCAD is at 1.3020 while 1.3395 – 1.3108  is a more significant resistance area. July 6^th high at 1.3056 is another level to pay attention to. Today’s NFP announcement could bring volatility and should the number deviate strongly from expectations then supports and resistances are more likely to be broken with higher volatility.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

USDCAD, 240 min

USDCAD created a daily shooting in yesterday’s trading and is now trading at support at 1.2943. The pair is trading between 4h moving averages (30 and 50 SMA). The 15 min chart shows a series of lower high values in the high values over the last two hours. Only one of the recent candles at the time of writing has tried to challenge this pattern. This suggests that market is not trying turn higher from this support. Nearest resistance is at 1.2940 (next at 1.2930) while the nearest support is at 1.2940 (next at 1.2930).

The 4h Stochastics are oversold indicating that the market could rally before breaking lower. However, this would need to be confirmed by the price action. With the daily shooting star candle created in yesterday’s trading I’m preparing for this market to break lower rather than rallying higher first. If price breaks below 1.2940, I looking for sell signals after rallies with targets as follows: 1.2905 (T1) and 1.2860 (T2). Should the market however rally higher first I would be looking for sell signals at 1.3017 – 1.3030 sell area. If this was the case my targets are higher as follows: 1.2975 (T1) and 1.2340 (T2).

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

USDCAD, Daily         

Canada’s retail sales are consistent with a resumption in April GDP growth of 0.1%. The 0.1% gain in retail shipment volumes during April (values grew 0.9%) follows the equally subdued 0.2% rise in April wholesale shipment volumes. There was a sizable 1.4% gain in April manufacturing shipment volumes, however. The expected 0.1% gain in April GDP would follow the 0.2% pull-back in March and 0.1% dip in February. But that will give way to a hefty 0.5% m/m decline in May, leaving a 1.0% drop in real Q2 GDP due to the temporary halt in oil sand production. As for the other related data housing starts did slow 5.2% to a 191.4k unit clip in April, which could leave a negative contribution from construction production. Mining, oil and gas production are the usual wildcard, but appear to be on track to add to total GDP growth in April. Manufacturing petroleum and coal product shipment values rose 8.3% in April while energy exports grew 7.6% in April.

Canada CPI is also outperforming US, EU and Japan. Canada’s CPI outperforms comparable measures in the US, Japan, and Eurozone. Notably, the potential for deflation is a minor concern in Canada, contrasting with ongoing worries in Japan and Europe and lingering concern that the U.S. recovery will underwhelm and thus restrain price growth. While there are caveats to Canada’s inflation outperformance in recent years, faster total and core CPI growth remains an important advantage as the G-7 nations maintain historically accommodative monetary policy conditions in order to facilitate the long sought return to self-sustaining economic and inflation growth.

USDCAD traded to a nine-session low of 1.2743 following the better Canadian retail sales outcome, before reversing to 1.2800. WTI crude is off earlier highs, now trading south of $50/bbl, as weekly US Crude Oil inventories, expected to show a drawdown of 1.3 million barrels, actual came in the same as last week at 0.9million barrels.

Next support for USDCAD is penciled in at 1.2700, 1.2640 and then not till 1.252. To the upside there is resistance at 1.2850 (50 DMA) 1.2970 and 1.3100.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

USDCAD, Daily

Canada employment grew 13.8k in May, much better than anticipated (median 5.0k) following the 2.1k dip in April. Full time employment surged 60.5k in May after falling 2.4k dip in April. Part time employment fell 46.8k in May after the 0.4k rise in April. The unemployment rate fell to 6.9% in May (median 7.1%) from 7.1% in April. The participation rate was 65.7 in May versus 65.8 in April.

USDCAD reacted lower on the surprisingly good numbers and hit a support at 1.2656. Should this support hold the market will challenge the 1.2767 resistance. However, the pair is in a downtrend and the likelihood of supports being broken is higher than that of resistance levels. In the event of market breaking lower the May low at 1.2464 will come into play.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

USDCAD, H1      

Canada’s CPI accelerated to a 1.7% y/y pace in April, as expected (median +1.7%) from the 1.3% y/y pace in March. CPI rose 0.3% on a month comparable basis in April (median +0.4%) after the 0.6% bounce in March. The BoC’s core CPI index gained 0.2% m/m in April after the stunning 0.7% gain in March. Annual core CPI growth expanded at a 2.2% y/y rate in April, faster than anticipated (median +2.1%) after running at a 2.1% clip in March. The acceleration in core CPI leaves the measure at the fastest annual pace since the 2.4% clip in July of 2015.

USDCAD rallied from 1.3090 lows to 1.3117 following the Canadian data, which revealed weaker than expected retail sales, and a slightly cooler headline CPI print. WTI crude prices continue to move away from their trend highs, now at session lows of $48.39, also USDCAD supportive. The pair has had a strong week and is showing no particular signs of giving much back, it opened the week at 1.2932.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

USDCAD, Daily

Canada CPI slowed to a 1.3% y/y pace in March, leaving a modestly faster growth pace than expected (median +1.2%) following the 1.4% growth rate in February. CPI jumped 0.6% m/m in March after the 0.2% gain in February. The BoC’s core CPI accelerated to a 2.1% y/y pace in March, contrary to projections (median +1.8%) from the 1.9% rate in February. Core CPI shot 0.7% higher on a month comparable basis after the 0.5% gain in February.

The run-up in core CPI puts the measure back above the BoC’s 2.0% midpoint, but the focus at the Bank remains on the growth outlook, which remains subject to downside risk as outlined by Poloz this week and last week. Moreover, the Bank has repeated that temporary factors are behind recent elevated core CPI growth rates, with actual underlying inflation running at around 1.7%. Hence, based on today’s report we should look for steady rates for an extended period of time.

USDCAD continues in the downward sloping trend channel with the nearest support and resistance levels at 1.2561 and 1.2750. The next significant daily support resistance levels can be found at 1.2132 and 1.2917. Continued strength in oil prices keep also pressure on the pair.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

USDCAD, Daily

AUD and CAD got hammered as the Doha meeting on oil restrictions failed and caused substantial concerns over the oil cartel OPEC’s ability to restrict and control the oil production. This caused the oil futures to open significantly (3.86%) lower today while it also caused the commodity currencies to gap overnight. According to Reuters tensions between Saudi Arabia and Iran were blamed for the failure, which revived industry fears that major government-controlled producers will increase their battle for market share by offering ever-steeper discounts.

Among others the USDCAD pair jumped above my sell area. I wrote two last week that USDCAD is oversold and therefore vulnerable to contra trend moves. I mentioned that Crude oil was also looking weak and I thought it might incite a rally in the inversely correlated USDCAD. This is indeed what indeed happened: market rallied higher and provided us a great sell signal that led to a nice move lower and a profitable trade. My T1 was hit on Thursday providing our traders with up to 100 pips depending on the strategy applied. Those that closed the whole position at T1 or followed the risk management rules laid out in my Position Management webinar weren’t hurt by the weekend gap. This gap is yet another reminder that it’s the risk management that is the single most important feature in our business plan.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.