Loonieviews 22Sep16


Dollar falls, Fall begins

USDCAD Open (6:30 am) 1.3035-39 Overnight Range 1.3029-1.3104 22 Sept 16

FX-At-A-Glance

NOTE: This chart represents gain (or loss) of G10 currencies vs the US dollar from NY close (4:00pm) to Sept. 22, 6:30 am EDT

There is nothing like an hour long automatic Windows 10 update to start the morning.

The Federal Open Market Committee’s decision to leave interests on hold combined with a downward tweak to GDP growth forecasts sent the US dollar into a tailspin overnight. The tone of the statement and Janet Yellen’s press conference opened the door a little wider to a December rate hike . Asia and Europe traders responded with a “I’ll believe it when I see it” attitude. EURUSD moved slightly higher in Asia but accelerated in Europe. GBPUSD followed EURUSD higher but Brexit concerns are a bigger problem for Sterling than US interest rates, at the moment.

In Asia, NZDUSD couldn’t sustain its post FOMC gains thanks to the Reserve Bank of New Zealand. They left interest rates unchanged at 2.0% but had a clear easing bias and NZDUSD was sold. USDJPY failed to extend modest gains following the Fed announcement and traded sideways.

The Canadian dollar had a really good night. USDCAD sank steadily in Asia and Europe on the back of firm oil prices and the FOMC stance. USDCAD’s failure to break above resistance at 1.3250 and its subsequent break below 1.3180 and 1.3120 caught traders “long and wrong”. Stop loss selling exacerbated the move down.

Today’s US data won’t be much of a factor as it is overshadowed by yesterday’s FOMC statement. USDCAD traders will watch oil price movements for direction.

USDCAD technical outlook.

The intraday USDCAD technicals are bearish following yesterday’s break of the September uptrend line at 1.3180. The subsequent move below 1.3120 suggests that a short term top is in place at 1.3250 and shifts the focus to a test of support at 1.2980 which represents the 61.8% Fibonacci retracement level of the September range. For today, USDCAD support is at 1.3020 and 1.2980. Resistance is at 1.3080 and 1.3120.

Today’s Range 1.2980-1.3080

Chart: hourly chart with Fibonacci levels

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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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