USD/CAD: Eyes on Poloz first, then focus will turn to Fed
Macroeconomic overview
Speculators turned bullish on the CAD last week for the first time since September, data from the Commodity Futures Trading Commission and Reuters calculations showed. Canadian dollar positions swung to net long 2,519 contracts as of January 24 from net short 5,456 contracts a week earlier. The loonie rose 1.3% last week as investor fears of a more unfavorable trade outlook for Canada abated and after U.S. President Donald Trump signed orders on Tuesday smoothing the path for the Keystone XL oil pipeline.
The USD/CAD recovered slightly at the end of the week. The CAD weakened as oil fell and investors braced for a speech by Bank of Canada Governor Stephen Poloz scheduled for Tuesday. The market expects him to retain his dovish commentary and try to talk the currency down. No dovish hint from Poloz is likely to support the loonie.
The market is also looking forward to Tuesday's Canadian GDP data. In the second half of this week the most important event for the USD/CAD will be the Fed statement.
Technical analysis
The USD/CAD recovered to the resistance at 1.3163 (38.2% fibo of May-December rise). The pair is also still below the 7-day exponential moving average, which suggests that recent upward move is not a reason to change the trading strategy. Fundamentals will play key role this week (Poloz speech, Fed statement). If the USD/CAD gets no additional fuel from surprisingly dovish Poloz (Tuesday) or hawkish Fed (Wednesday), it may fall to at least 1.3000 at the end of this week.
Trading strategy
The target of our short-term target remains at 1.3030. Our profit on this position is locked in at 1.3180, slightly above the key resistance levels. Our long-term view is bearish.
More forex trading strategies growthaces.com
Macroeconomic overview
Speculators turned bullish on the CAD last week for the first time since September, data from the Commodity Futures Trading Commission and Reuters calculations showed. Canadian dollar positions swung to net long 2,519 contracts as of January 24 from net short 5,456 contracts a week earlier. The loonie rose 1.3% last week as investor fears of a more unfavorable trade outlook for Canada abated and after U.S. President Donald Trump signed orders on Tuesday smoothing the path for the Keystone XL oil pipeline.
The USD/CAD recovered slightly at the end of the week. The CAD weakened as oil fell and investors braced for a speech by Bank of Canada Governor Stephen Poloz scheduled for Tuesday. The market expects him to retain his dovish commentary and try to talk the currency down. No dovish hint from Poloz is likely to support the loonie.
The market is also looking forward to Tuesday's Canadian GDP data. In the second half of this week the most important event for the USD/CAD will be the Fed statement.
Technical analysis
The USD/CAD recovered to the resistance at 1.3163 (38.2% fibo of May-December rise). The pair is also still below the 7-day exponential moving average, which suggests that recent upward move is not a reason to change the trading strategy. Fundamentals will play key role this week (Poloz speech, Fed statement). If the USD/CAD gets no additional fuel from surprisingly dovish Poloz (Tuesday) or hawkish Fed (Wednesday), it may fall to at least 1.3000 at the end of this week.
Trading strategy
The target of our short-term target remains at 1.3030. Our profit on this position is locked in at 1.3180, slightly above the key resistance levels. Our long-term view is bearish.
More forex trading strategies growthaces.com
