With a near empty calendar for the rest of the Monday session, this technical setup on USD/CAD is probably the most interesting setup for an intraday play.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 11532.25 +0.65% FTSE: 7184.96 +0.09% S&P500: 2806.54 +0.50% DJIA: 26180.43 +0.57% |
US 10-yr 2.673% +0.018 Bund 10-YR 0.105% +0.007 UK 10-YR: 1.172% +0.012 JPN 10-YR: -0.041% +0.006 |
Oil: 56.27 -1.73% Gold: 1333.40 +0.04% Bitcoin: 3781.10 +1.37% Etherium: 136.58 +2.68% |
Fresh Market Headlines & Economic data:
- Oil prices sink after Trump tells OPEC the ‘world cannot take a price hike’
- Trump Delays a Tariff Deadline, Citing Progress in China Trade Talks
- China deleveraging is dead as US$34t debt habit roars back
- Fed’s Bostic Expects One Rate Rise This Year, Another in 2020
- EU’s Tusk says Brexit delay would be ‘rational’
- Theresa May’s Brexit vote delay: what does it all mean?
- Juncker and May vow to end Brexit negotiations before March 21
- Britain facing prospect of Brexit delay, junior minister says
- Germany to escape recession, says finance minister
- NZ retail sales up in December, higher than expected
Upcoming Potential Catalysts on the Forex Calendar:
- Fed’s Clarida speaks in Dallas at 4:00 pm GMT
- Bank of England Inflation report hearings at 10:00 am GMT (Feb. 26)
What to Watch: USD/CAD
We’re seeing decent volatility in the Canadian dollar this morning, likely on a tweet from U.S. President Donald Trump telling OPEC that oil prices are too high. Oil and the Loonie both lost value on the news, which for USD/CAD maybe be setting up for a short-term play on a recently formed downtrend.
On the one hour chart of USD/CAD above, the pair is creating a pattern of lower ‘highs’ and ‘lows’ over the past week, and today’s bounce may lead into another formation of a lower ‘high’. And with the forex calendar pretty much empty for both the Greenback and the Loonie until tomorrow’s trading session, technical setups are likely to be in more focus for this session.
So, the Trump tweet should have a short-term bullish affect on the pair, the bigger themes of forward progressing U.S.-China trade negotiations and the Fed slowing down its tightening should continue to put pressure on USD while lifting risk assets like the Loonie. And we may get another spark of USD weakness today with Fed member Richard Clarida speaking in Dallas today if he re-iterates the Fed’s shift to ending the balance sheet runoff and postponing rate hikes.
USD/CAD bears should watch the Fibs and major psychological level of 1.3200 for a retest and reversal back to the downside to potentially short. And for USD/CAD bulls, it’s tough to make a fundamental case for today, but lately we’ve getting surprise catalysts like Trump’s tweet earlier that could take the pair beyond the Fibs and maybe even break the lower ‘highs’ pattern. Watch out for those scenarios to line up for a potential long position, which could have momentum potential since it’s the low probability scenario at the moment.