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USDCAD fell out on the BoC Wilkins speech

Market Analysis
2017-06-13_11-11-02

USDCAD, Daily

The dollar has been trading mixed, moderately firmer versus the yen and euro, but losing ground to the Canadian dollar, which was given a boosted by relatively hawkish rhetoric by BoC’s Wilkins yesterday, in addition to the Australian and New Zealand dollars. BoC’s Wilkins said bank is assessing the need for current stimulus, saying they are “assessing whether all of the considerable monetary stimulus presently in place is still required.” The economy is showing encouraging signs, she said, with the adjustment to oil prices largely in the past and growth is broadening across regions and sectors. The more broad-based economic growth is makes it more likely that it (growth) will be sustainable over the medium term. Yet she did say that slack in the economy is still translating into below target inflation and risks to the outlook remain. The downward drift in core inflation in recent quarters point to the lagged effects of slack in the economy.

USDCAD fell out of bed on the BoC Wilkins headlines, and closed yesterday below 200-EMA and the lower Bollinger bands, at 1.3323. Today, it seems that Loonie continues gaining ground against US dollar, since the pair is extending its Lower Bollinger bands, in both Daily chart and intraday chart such as the 4 hours one.

Therefore, a Short position was taken today with entry at 1.3272.  Several Targets were set since by considering a possible heads and shoulder formation since February 27, I believe that pair might presents near 61.8 Fibonacci level. Therefore, firstly an intraday Target was set at 1.3230. Daily Targets were set at 1.3190 (a confluence of 61.8 Fibonacci level and the 14 DATR no.) and at 1.3100. Support is at 1.3400.

In the Daily chart, RSI is at 30 looking towards the oversold territory, while Parabolic SAR turned negative since Friday.

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Andria Pichidi

Market Analyst

HotForex

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