This week, Canada should play a main actor on the FX stage with plenty of economic data.
- Canada GDP
- RBC Manufacturing PMI
- BOC Meeting
- Canada Employement report
I think those are last pieces of Canada in this financial year; after this week, BOC members would shut down their computers and book the ticket for Chirstmas holiday.
Canada economic data in November were mixed with stronger expect of employment data and CPI but lackluster in Ivey PMI, Retail Sales and Wholesale Sales.
Hence, I don't think BOC will do something in this meeting. It's very surprised if BOC talk about rate cut because there is no room for any rate cut; however, they will leave an open door for more measure if necessary. This financial year should end for BOC .
- Canada employment report is important to watch, but it is released at the same time with NFP, likely it would be shadowed by US data. If NFP is positive, and Canada employment report is positive, market chooses NFP to react, if NFP is negative, and Canada employment report is positive, markets chooses Canada data, if both data are negative, market chooses NFP. Simply.
The key point I want to talk is oil price. When SU-24 incident was over, market will back to the Fundamental to trade oil . The supply surplus is a biggest problem of OPEC currently; too many oil on the market right now, all oil export countries are trying to produce as much as possible despite of low price. Lower oil price, lower Loonie.
Oil sends negative signals to Loonie, the only way to escape the impact of oil price is Canada shouldn't rely on oil industry, but it seems it's imposible.
Last week, USDCAD tried to test the YEAR HIGH at 1.3450 but unfortunately the effort was failed. USDCAD was beat from the year high to below 1.3300
This week, with the return of data, I think USDCAD will try to retest YEAR HIGH one more time.
I see an I draw on the chart.
And a potential head and shoulder pattern.
So which one does Loonie choose to follow ?
This is a tough question.
I think to answer for that question, we should wait for two things:
- Only USDCAD sets a firm stand above 1.3370 level, Channel is chosen.
- Only USDCAD breaks the , is chosen.
However, I like BUY than SELL USDCAD . I choose Channel.
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