Fundamental Overview
The US Dollar has been
gaining ground across the board this week despite the lack of economic data and
lower Treasury yields, essentially moving forward by inertia.
Stanley Druckenmiller said
in an interview yesterday that the market is already positioning for a Trump
victory given the moves in some stocks like DJT for example.
That could explain the
recent USD strength as it should appreciate on higher growth and less rate cuts
expectations. Nevertheless, not all markets have been in sync with this view,
so it could be just noise.
For now, we can only work
with data and today we get the US retail sales and jobless claims figures which
will likely be market moving. The key events though will be in November when we
get the October data and the US election.
On the CAD side, the latest
Canadian
CPI missed expectations and sealed the 50 bps cut at the upcoming meeting
with the market seeing now a 73% probability from 48% before the inflation
report.
The Loonie appreciated
following the data release although that might have had to do more with a “sell
the fact” reaction as the market priced in already a very aggressive rate cuts
path for the BoC.
USDCAD
Technical Analysis – Daily Timeframe
USDCAD Daily
On the daily chart, we can
see that USDCAD fell below the key 1.3785 level following the Canadian CPI report.
The sellers will likely keep on stepping in around this level to position for a
drop into the 1.36 support,
while the buyers will look for a break higher to increase the bullish bets into
the 1.39 handle next.
USDCAD Technical
Analysis – 4 hour Timeframe
USDCAD 4 hour
On the 4 hour chart, we can
see that the price broke below the steep trendline that was defining the strong
bullish momentum. The sellers piled in on the break to position for new lows
and the price is now testing again the 1.3785 level. The buyers will want to
see the price breaking higher to start targeting new highs.
USDCAD Technical
Analysis – 1 hour Timeframe
USDCAD 1 hour
On the 1 hour chart, we can
see more clearly the resistance zone around the 1.3785 level. There’s not much
else to add here as the buyers will look for a break higher, while the sellers
will step in for a move lower. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US Retail Sales and US Jobless Claims data.