Asian session trading may have been a snoozer, but that doesn’t mean the next trading sessions will be! Here’s why USD/CAD could see movement in the next couple of hours.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Australian consumer sentiment falls further in January
- Yuan, Australian dollar struggle to wipe off coronavirus concerns
- Asian stocks bounce as investors welcome China virus response
- Oil declines as market surplus forecast counters Libya worries
Upcoming Potential Catalysts on the Forex Calendar:
- U.K.’s public sector borrowing at 9:20 am GMT
- U.K.’s CBI industrial order expectations at 11:00 am GMT
- Canada’s CPI numbers at 1:30 pm GMT
- Canada’s wholesale sales at 1:30 pm GMT
What to Watch: USD/CAD
There are not a lot of economic themes at play so traders will likely pay more attention to Canada’s top-tier events today. Not only will we see inflation numbers, but the Bank of Canada (BOC) will also publish its monetary policy statement.
Traders aren’t expecting policy changes from BOC but Governor Poloz and his team will probably communicate their concern over Canada’s weakening trade, manufacturing, consumer spending, and GDP by being less optimistic.
USD/CAD could take advantage of an anti-CAD move since it’s already above an established range on the 1-hour time frame. A bounce from the 1.3075 levels could propel the pair to the 1.3100 – 1.3110 previous area of interest.
But the BOC has surprised to the upside before. If the central bank maintains its optimism, or if today’s CPI reports churn out much better-than-expected numbers, then USD/CAD bears can take advantage of the chart’s bearish divergence and drag the pair back to its 50-pip range.
Planning on trading USD/CAD today? Here’s MarketMilk’s volatility guide to help you set up your stop losses:
