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The Loonie is on the move thanks to the BOC, and with more negative economic updates from the U.S., USD/CAD looks like it has more short-term pips to give.

Before moving on, ICYMI, today’s Daily London Session Watch list looked at an opportunity forming on NZD/JPY on upbeat data from New Zealand, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 13141.97 +1.18%
FTSE: 7170.60 +0.17%
S&P 500: 3116.49 +0.75%
DJIA: 27684.57 +0.66%
US 10-yr 1.771% -0.117
Bund 10-YR -0.331% +0.014
UK 10-YR: 0.728% +0.058
JPN 10-YR: -0.03% -0.007
Oil: 58.22 +3.73%
Gold: 1477.60 -0.46%
Bitcoin: 7487.02 +3.76%
Etherium: 149.62 +2.66%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:

  • Japan Tankan index at 11:00 pm GMT
  • Japan Foreign investment at 11:50 pm GMT
  • Australia Trade balance & Retail sales at 12:30 am GMT (Nov. 5)
  • BoJ Harada speech at 1:30 am GMT (Nov. 5)

What to Watch: USD/CAD

USD/CAD 1-Hour Forex Chart
USD/CAD 1-Hour Forex Chart

The Bank of Canada held the overnight rate at 1.75% and commented on the stabilization seen in the global economy, lowering the odds of a rate cut coming anytime soon, hence the rally higher in the Loonie. We also got more disappointing U.S. business sentiment data today, most notably the ISM services PMI read coming in at 53.9 in November vs. 54.7 in March. It looks like this is putting the pressure on the Greenback, and with a lack of any major catalysts on the calendar for the rest of the session, there could be momentum here to catch for the next few sessions.

With USD/CAD breaking below a minor support area around 1.3270, the bears are very much in control and could take this pair down to the next potential support area at the previous swing low around 1.3200. But after a strong break lower, it may be a good idea to wait for a bounce higher before jumping in short to improve the potential return-on-risk. For the more aggressive, jumping in a current levels (around 1.3225) won’t give a great potential return-on-risk, but odds are better of catching some pips and not missing the move.

If you’re a bull on USD/CAD, it’s probably a good idea to wait for a retest of the previous support area and see if it holds. But unless the fundamental/geopolitical picture changes, this is a low odds bet for the next session as traders will likely remain in sell mode on USD/CAD.