Loonievews 25Aug16


Come back tomorrow

USDCAD Open (6:00 am) 1.2910-14 Overnight Range 1.2900-1.2934 25Aug16

FX-At-A-Glance

NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close (4::00pm) to Aug 25, 6:00 am EDT

Dull, humdrum, monotonous and mundane are a just a few words to describe the action in overnight FX markets. That is exactly the same description as the day before and it is more than likely how today’s North American session will turn out. Financial markets have decided that Janet Yellen’s speech, supposedly tonight around 7-8pm MT, will be the speech where she confirms or contradicts the hawkish comments by many of her colleagues in the past couple of weeks. Janet Yellen hasn’t confirmed (or denied) any such thing. She may believe policy announcements are best left to policy decision days and say nothing. If that is the case, the US dollar will tank.

Today’s US data may not be enough to spark much interest ahead of the Jackson Hole speech. Durable Goods Orders is expected to rebound and post a 0.5% gains vs. June’s -0.5% loss. Markit Services PMI is forecast to rise to 52.0 from 51.4 while Jobless claims should come in at 265,000. If the data comes in as expected, traders will go back to sleep.

Global equity indices drifted lower overnight, following the lead of Thursday US equity market close.

USDCAD drifted lower, despite soft oil prices, on the back of a weaker US dollar vs. the majors. There isn’t any domestic data today.

USDCAD technical outlook.

The intraday USDCAD technicals are bearish while trading below 1.2920 looking for a break below support at 1.2890 to extend losses to 1.2850. A move above 1.2925 will lead back to 1.2950 which if broken targets 1.2990. Longer term, the 1.2650-1.3250 trading range has been intact since the beginning of May and USDCAD is currently very close to the middle of that band. A doveish Fed and higher oil prices will drive USDCAD to the bottom while a hawkish fed and weaker oil prices will put the top in play.

For today, USDCAD support is at 1.2900, 1.2880 and 1.2850. Resistance is at 1.2930, 1.2960 and 1.2990.

Today’s Range 1.2890-1.2950

Chart: USDCAD daily

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Author: Loonieviews

In the past 30+ years, I have been an FX interbank market making trader, a high performing FX and Derivatives Sales person, creator of simple and complex risk mitigation strategies and a manager of high performance FX teams. The Trade of the Day is a culmination of that experience. Retail FX traders have access to a well-crafted and carefully researched FX trade strategy designed to generate FX profits while mitigating losses.

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