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Daily Financial Market News

Fri, 22 Sep 2017 08:00:00 GMT

Strong Canada Consumer Price Index (CPI) to Cap USD/CAD Rebound

Strong Canada Consumer Price Index (CPI) to Cap USD/CAD Rebound Menu    Search DailyFX Home   Rates   Charts Market News        Real-Time News Daily Briefings Forecast Market Alerts DailyFX Authors Articles Technical Analysis        Analyst Picks Support & Resistance Daily Technical Reports Pivot Points Sentiment Articles Algorithmic Trading Calendars        Economic Calendar Webinar Calendar Central Bank Rates Dividend Calendar Education Beginner Intermediate Advanced Expert Free Trading Guides DAILYFX PLUS Toggle navigation News News   Market News Real-Time News Daily Briefings Forecast Market Alerts DailyFX Authors Articles Market News Headlines Strong Canada Consumer Price Index (CPI) to Cap USD/CAD Rebound Bitcoin Prices Under Pressure- Time to Buy? AUD/USD Range Snaps Following FOMC; RBA Tames Bets for 2017 Rate Hike Technical  Analysis Analysis   Technical Analysis Analyst Picks Support & Resistance Daily Technical Reports Pivot Points Sentiment Articles Algorithmic Trading Technical Analysis Headlines Japanese Yen Technical Analysis: Year’s Lows Creep Back Into Focus GBP/USD Approaches Important Long Term Price Zone S&P 500 Bulls Undeterred by Hawkish Fed; Eyes on Slope Resistance Calendars Calendar   Economic Calendar Webinars Calendar Central Bank Rates Dividend Calendar Forex Economic Calendar Time Event Actual Forecast Rates   Charts   Education Edu   Education Beginner Intermediate Advanced Expert Free Trading Guides DAILYFX PLUS DFX+    Search × Get the best parts of DailyFX.com in the new DailyFX App Download × Join Us For Our Free Webinars Get daily market analysis from our in-house experts Choose from more than 25 webinars each week Put your questions to our experts in real-time Q&As Register now Want to hold off on improving your trading? Click here to dismiss. × Get Your Free Trading Guides With your broad range of free expert guides, you'll explore: The basics of forex trading and how to develop your startegy Foundational knowledge to help you develop an edge in the market What's ahead for major FX pairs, Gold, Oil and more Download a Free Guide Want to hold off on improving your trading? Click here to dismiss. EUR/USD EUR/USD Low ------ High ------ View More Note: Low and High figures are for the trading day. News Post FOMC, BoJ Price Action Setups (Sept. 21, 2017) EUR/USD Steady as Draghi Avoids Mention of Monetary Policy FOMC-Fueled USD Runs into Resistance: GBP/USD, EUR/USD Primed GBP/USD GBP/USD Low ------ High ------ View More Note: Low and High figures are for the trading day. News GBP Coiled Ahead of Make-or-Break Brexit Speech SPX Wavers but Holds, VIX Below 10, Pound Ready for Volatility It’s Prime Minister May’s Turn to Charge or Sink GBP/USD USD/JPY USD/JPY Low ------ High ------ View More Note: Low and High figures are for the trading day. News Japanese Yen Technical Analysis: Year’s Lows Creep Back Into Focus USD/JPY Trend: Is This a Long Term Bottom? Post FOMC, BoJ Price Action Setups (Sept. 21, 2017) Gold Gold Low ------ High ------ View More Note: Low and High figures are for the trading day. News DailyFX Morning Digest: US Dollar Getting Much Needed Lift from FOMC US Dollar Bottoming Process May Finally Be Starting Crude Oil Price Hit 4-Month High, Gold Drops on FOMC Outcome Oil Oil Low ------ High ------ View More Note: Low and High figures are for the trading day. News Crude Oil Price Hit 4-Month High, Gold Drops on FOMC Outcome Gold Price Drop May Resume on Steady FOMC Policy Outlook Crude Oil Prices Remain Bid as Iraq Hints at More OPEC Measures BITCOIN BITCOIN Low ------ High ------ View More Note: Low and High figures are for the trading day. News Bitcoin Prices Under Pressure- Time to Buy? Near-term Setups in EUR/USD, Bitcoin & Ethereum Pound Surges, Bitcoin Plummets Ahead of Pivotal FOMC Meeting View More   More Real-Time News Facebook Twitter Youtube Google + Strong Canada Consumer Price Index (CPI) to Cap USD/CAD Rebound by  David Song, Currency Analyst  Central bank policy, economic indicators, and market events. Connect via: - Canada Consumer Price Index (CPI) to Pick Up for Second Consecutive Month. - Core Rate of Inflation Held Steady at 1.4% per Annum in July. - Sign up & Join DailyFX Currency Analyst David Song LIVE to Cover Canada’s CPI Report . Trading the News : Canada Consumer Price Index (CPI) Another uptick in Canada’s Consumer Price Index (CPI) may rattle the near-term rebound in USD/CAD as it puts pressure on the Bank of Canada (BoC) to deliver another rate-hike over the coming months. The BoC may continue to implement higher borrowing-costs as ‘ the level of GDP is now higher than the Bank had expected ,’ and Governor Stephen Poloz and Co. may prepare Canadian households and businesses for another rate-hike at the next meeting on October 25 as the central bank notes that ‘t here has been a slight increase in both total CPI and the Bank’s core measures of inflation, consistent with the dissipating negative impact of temporary price shocks and the absorption of economic slack .’ As a result, the shift in USD/CAD behavior may continue to unfold throughout the second-half of 2017, but a below-forecast CPI print may encourage a more meaningful correction in the exchange rate especially as the Federal Open Market Committee (FOMC) embarks on a more aggressive approach in moving away from its accommodative stance. Impact that Canada’s CPI report has had on USD/CAD during the previous release Period Data Released Estimate Actual Pips Change (1 Hour post event ) Pips Change (End of Day post event) JUL 2017 08/18/2017 12:30:00 GMT 1.2% 1.2% -68 -70 July 2017 Canada Consumer Price Index (CPI) USD/CAD 5-Minute Chart Canada’s Consumer Price Index (CPI) increased for the first time since January, with the headline reading climbing to an annualized 1.2% from 1.0% the month prior. Nevertheless, the core rate of inflation held steady at 1.4% per annum during the same period, but signs of budding price pressures may encourage the Bank of Canada (BoC) to further normalize monetary policy in 2017 as the central bank warns ‘t he factors behind soft inflation appear to be mostly temporary .’ The Canadian dollar rallied followed the print, with USD/CAD slipping below the 1.2600 handle to end the day at 1.2583. How To Trade This Event Risk ( Video ) Bullish CAD Trade: Headline & Core Inflation Picks Up in August Need a red, five-minute candle following the report to favor a short USD/CAD trade. If market reaction favors a bullish loonie position, sell USD/CAD with two separate lots. Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward. Move stop to breakeven on remaining position once initial target is met, set reasonable limit. Bearish CAD Trade : Canada CPI Falls Short of Market Expectations Need a green, five-minute USD/CAD candle to favor a short loonie position. Implement the same setup as the bullish loonie trade, just in reverse. Potential Price Targets For The Release USD/CAD Daily Chart Check out our USD/CAD quarterly projections in our F REE DailyFX Trading Forecasts USD/CAD may continue to retrace the decline from the summer months as the 1.2080 (61.8% expansion) region offers support, while the Relative Strength Index (RSI) deviates with price and threatens the bearish formation from earlier this year. In turn, dollar-loonie may make a more meaningful attempt to break out of the downward trending channel from May, with a close above the 1.2350 (38.2% expansion) hurdle raising the risk for a move back towards the former-support zone around 1.2440 (23.6% expansion). Keep in mind the broader outlook for USD/CAD remains tilted to the downside as the pair fails to preserve the bullish formation from 2012. Interim Resistance:1.2770 (38.2% expansion) to 1.2830 (38.2% retracement) Interim Support: 1.1890 (78.6% expansion) to 1.1920 (May 2015-low) USD/CAD Retail Sentiment Track Retail Sentiment in Real-Time with the New Gauge Developed by DailyFX Retail trader data shows 69.4% of traders are net-long USD/CAD with the ratio of traders long to short at 2.27 to 1. In fact, traders have remained net-long since Jun e 07 when USD / CAD traded near 1.3498; price has moved 8.6% lower since then. The number of traders net-long is 8.7% lower than yesterday and 11.0% lower from last week, while the number of traders net-short is 7.0% lower than yesterday and 5.8% higher from last week. --- Written by David Song, Currency Analyst To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong. To be added to David's e-mail distribution list, please follow this link . DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. DISCLOSURES Related Articles Previous Articles From trading news reports Related Prev Articles   Bitcoin Prices Under Pressure- Time to Buy?   AUD/USD Range Snaps Following FOMC; RBA Tames Bets for 2017 Rate Hike   FOMC-Fueled USD Runs into Resistance: GBP/USD, EUR/USD Primed   US Dollar Bottoming Process May Finally Be Starting   Crude Oil Price Hit 4-Month High, Gold Drops on FOMC Outcome   Federal Reserve Interest Rate Forecast to Sway EUR/USD Outlook   GBP/USD Vulnerable to Further Losses on 7 to 2 BoE Split   Upbeat Australia Employment Report to Generate AUD/USD Rebound   GBP/USD Risks Larger Advance Ahead of BoE on Strong U.K. CPI Report   USD/CAD: Post-BoC Losses to Accelerate on Strong Canada Employment Advertisement Upcoming Events Economic Event Importance Actual - Forecast - Previous Importance Actual - Forecast - Previous Forex Economic Calendar A:  Actual   F:  Forecast     P:  Previous

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