About this pair, I concentrate in Technical Analysis because there is no value information about Fundamental Analysis this week. Just two pieces of data relating to US and Canada, CPI data, are valuable, but I think it would not have much impact on USDCAD.
Theoretically, if CPI is positive, the currency is positive too. If Canada CPI is positive, USDCAD would fall down and vice versa. Canada CPI increased in three consecutive months, from 0.7%-0.9%-1.2%
Clearly, dovish bias of BoC had remarkable effect on Loonie. The question is whether the advance of CPI would continue or halt below 2% target.
I think the Canada CPI will be stable around 1.2%-1.3% . Advance above 1.5%, BoC could rethink their bias, but that is the problem of future.
Come back Technical Analysis:
Look at on the chart, there is a falling wedges pattern formed after one month decline of USDCAD. We could consider this is the correction period after a long advance. The problem is the target of this correction. Usually, a falling down below 50% Fib Retracement could mark the uptrend officially stops. USDCAD now be above 38.2% Fib retracement, so we should be cautious about changing in the trend.
38.2% Fib retracement level now provides a good support level, but I think this is not a strong support, this level was pierced three times in two weeks, and it could be pierced anytime. A break this level would drive the price to 50% Fib retracement level.
Next weeks, if US economy is still stagnation, 50% Fib Retracement would be the level U/C will test and stable above this level.
USDCAD now looks like a car which has no fuel as well as driver. I think traders should be patient.
A break above the upper line of falling wedges would be the BUY signal to 1.1066 level: 23.6%Fib retracement.
A break below the bottom line of falling wedges and 38.2% Fib retracement would be the SELL signal to 1.09 level : 50% Fib retracement level.
I stand out USDCAD : Wait and observe.
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Theoretically, if CPI is positive, the currency is positive too. If Canada CPI is positive, USDCAD would fall down and vice versa. Canada CPI increased in three consecutive months, from 0.7%-0.9%-1.2%
Clearly, dovish bias of BoC had remarkable effect on Loonie. The question is whether the advance of CPI would continue or halt below 2% target.
I think the Canada CPI will be stable around 1.2%-1.3% . Advance above 1.5%, BoC could rethink their bias, but that is the problem of future.
Come back Technical Analysis:
Look at on the chart, there is a falling wedges pattern formed after one month decline of USDCAD. We could consider this is the correction period after a long advance. The problem is the target of this correction. Usually, a falling down below 50% Fib Retracement could mark the uptrend officially stops. USDCAD now be above 38.2% Fib retracement, so we should be cautious about changing in the trend.
38.2% Fib retracement level now provides a good support level, but I think this is not a strong support, this level was pierced three times in two weeks, and it could be pierced anytime. A break this level would drive the price to 50% Fib retracement level.
Next weeks, if US economy is still stagnation, 50% Fib Retracement would be the level U/C will test and stable above this level.
USDCAD now looks like a car which has no fuel as well as driver. I think traders should be patient.
A break above the upper line of falling wedges would be the BUY signal to 1.1066 level: 23.6%Fib retracement.
A break below the bottom line of falling wedges and 38.2% Fib retracement would be the SELL signal to 1.09 level : 50% Fib retracement level.
I stand out USDCAD : Wait and observe.
If you like my analysis, please visit my site: www.sforex-solution.com/index.html
And like my FB page: www.facebook.com/sforexsingals
Following me on Twitter: twitter.com/SforexSolution