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Uncle Sam’s PMIs are out today!

How will the release affect USD/CAD’s 4-hour range?

Before moving on, ICYMI, yesterday’s watchlist checked out EUR/AUD’s descending channel ahead of ECB’s policy decision. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

ECB raised interest rates by 50 bps, its first rate hike since 2011

ECB approved the Transmission Protection Instrument (TPI) bond purchase scheme

ECB hinted at more rate hikes on a data-dependent, meeting-to-meeting basis

Philly Fed manufacturing index dips further from -3.3 to -12.3 in July

U.S. unemployment claims spiked to 8-month high of 251K

AU manufacturing PMI slows from 56.2 to 55.7 in July

AU July services PMI dipped from 52.6 to 50.4

UK consumer confidence languishes at 48-year low of -41 in July

Japan’s annual inflation (2.2%) stays above BOJ’s target for 3rd straight month

Japan’s July factory activity growth slows to 10-month low of 52.2

UK June retail sales down by 0.1% despite Jubilee celebrations

French manufacturing activity contracted and services sector growth slowed in July

German manufacturing PMI contracts to 49.2 in July vs. 50.6 expected

Eurozone business activity contracted in July as price rises bite

UK firms report growth at 17-month low, inflation pressures ease

Asian stocks log best week in months; dollar lurks below highs

Euro retreats following gloomy PMIs

Upcoming Potential Catalysts on the Forex Economic Calendar:

Canada’s retail sales at 12:30 pm GMT
U.S. manufacturing and services PMIs at 1:45 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: USD/CAD

USD/CAD 4-hour Forex Chart

USD/CAD 4-hour Forex Chart

Risk-taking kept equities traders busy during the Asian and early London session trading.

Unfortunately for forex playas, ECB’s bigger-than-expected rate hike this week brought the focus back to the Fed and the possibility of a 100 bps rate hike next week.

Will today’s U.S. session themes help USD recover some of its weekly losses?

I’m eyeing USD/CAD because it’s sitting at the bottom of a 220-pip range while Stochastic is chillin’ near oversold levels.

If today’s U.S. PMI reports echo the disappointing numbers from the U.K. and Eurozone, then the Fed might think twice about being too aggressive in its tightening schedule.

The prospect of a less hawkish Fed decision next week could bust USD/CAD below its range and drag it firmly below the 1.2850 levels.

But if more traders take profits on their weekly anti-USD trades, or if Uncle Sam’s PMIs allow the Fed room to tighten its policies some more, then USD/CAD could bounce from its range support and probably target the mid-range levels near 1.3000.

What do you think?