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With no major catalysts expected, we’re checking out this technical pattern on USD/CAD ahead of central bank speak from both the U.S. and Canada.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/JPY ahead of U.K. GDP data, so be sure to check that out to see if there is still a potential play!

Equity Markets Bond Yields Commodities & Crypto
DAX: 13081.86 -1.02%
FTSE: 6333.50 -0.76%
S&P 500: 3560.99 -0.33%
NASDAQ: 11814.13 +0.23%
US 10-YR: 0.916% -0.073
Bund 10-YR: -0.53% -0.025
UK 10-YR: 0.361% -0.53
JPN 10-YR: +0.361% -0.053
Oil: 41.97 +1.25%
Gold: 1,878.10 +0.88%
Bitcoin: 16,115.00 +3.26%
Ethereum: 460.37 +0.58%

Fresh Market Headlines & Economic Data:

Bitcoin breaks above $16,000 for the first time since January 2018

Dow and S&P 500 fall as vaccine market rally pauses

Central Banks Curb Vaccine Euphoria With Notice of Economic Pain

Jobless claims totaled 709,000 last week, the Labor Department reported, below the 740,000 Wall Street forecast.

U.S. consumer prices unchanged in October

Home prices in the U.S. increase at the fastest rate since 2013

UK economic rebound leaves output far below pre-pandemic levels

Lagarde warns against vaccine optimism and hints at more ECB easing

ECB must act to fend off deflation, Bank of Spain official says

Industrial production down by 0.4% in euro area
and unchanged in EU

Upcoming Potential Catalysts on the Economic Calendar

EIA Oil inventory change at 4:00 pm GMT
ECB President Lagarde speech at 4:45 pm GMT
BOE Governor Bailey speech at 4:45 pm GMT
Fed Chair Powell speech at 4:45 pm GMT
Fed Evans speech at 6:00 pm GMT
BOC Wilkins speech at 6:30 pm GMT
New Zealand Manufacturing Index at 9:30 pm GMT
New Zealand Food Prices at 9:45 pm GMT
Australia Consumer Inflation expectations at 12:00 am GMT (Nov. 13)

What to Watch: USD/CAD

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

On the one hour chart above of USD/CAD, we can see the pair in a short-term rally, currently fueled by a return of risk-off sentiment as coronavirus cases continue to spike higher. In this scenario, speculation of more lockdowns coming is a drag on the markets, which could continue to push USD/CAD higher.

But the pair is now retesting a minor support area / Fibonacci retracement area, so if we do get positive catalysts (i.e., more positive COVID-19 vaccine/therapy news), then traders could view this technical setup as a potential signal to jump back in the longer-term trend lower that’s been going on since March.

For now, we don’t have major catalysts scheduled to possibly spark the turn, but the technical setup may be enough to draw in some sellers, especially since the stochastic divergence is signaling short-term over bought conditions.

But we do have lots of Fed speak ahead, so be on the look out for any hints of plans for additional stimulus, which is a possibility given the lower probability that we’ll see any U.S. fiscal stimulus immediately, or even by the end of the year.

If bearish patterns do form at the current levels without a fresh catalysts, be cautious until after the slew of central bank speak later in the session. Any surprises from a central bank does tend to spark big currency moves, especially when expectations are pretty low of any game changing commentary to come out from their speeches.