The Fed shocked the markets just yesterday and we’ve got Canadian CPI/retail sales tomorrow, which makes this simple range on USD/CAD one to watch for the next session or two.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 11516.48 -0.75% FTSE: 7321.41 +0.42% S&P500: 2830.19 +0.22% DJIA: 25804.07 +0.23% |
US 10-yr 2.521 -0.016 Bund 10-YR 0.048% -0.033 UK 10-YR: 1.089% -0.068 JPN 10-YR: -0.043% +0.012 |
Oil: 60.12 -0.18% Gold: 1313.80 +0.93% Bitcoin: 4022.04 -0.22% Etherium: 137.20 -1.05% |
Fresh Market Headlines & Economic data:
- Philly Fed Manufacturing Index rises to 13.7 after plunging to -4.1 in prior month
- US weekly jobless claims fall more than expected to 221K
- China imports, exports rebound in first half of March
- EU’s Verhofstadt: Impossible for Brexit extension to go beyond 23 May
- Theresa May to plead for Brexit delay at EU summit
- Bank of England holds interest rates steady amid Brexit chaos
- Australian jobless rate hits near eight-year low, tempering rate cut bets
- Australia central bank research shows income, not just property weakness, key for policy
- Statistics Canada reports wholesale sales up 0.6 per cent in January
- Canada Non-farm employment at 36.2k vs. 32.9k
- NZ GDP picks up but soft prices keep rates outlook benign
- New Zealand credit card spending up 6.4% y/y vs. 6.9% previous
- Swiss central bank trims inflation forecast
Upcoming Potential Catalysts on the Forex Calendar:
- Australia manufacturing and services PMI at 10:00 pm GMT
- Japan National CPI at 11:30 pm GMT
- Japan flash manufacturing PMI at 12:30 am GMT (Mar. 22)
- European flash manufacturing PMI (various release times Mar. 22)
- Canada CPI at 12:30 pm GMT (Mar. 22)
What to Watch: USD/CAD
USD/CAD has seen some chop in the last few sessions, fighting between a number of factors including the rise in oil market volatility, mixed U.S. economic data, and the latest monetary policy statement from the Federal Reserve.
Next we’ve got Canadian CPI and retail sales on tap as a potential catalysts for this pair, both of which are expected to improve on the previous month’s reads. If this is the case, this lines up with the recent trend lower and the recent events pushing the pair lower, making the resistance around 1.3350 that has held this past week the sell area to watch for the bears if reversal patterns pop up. And there’s an additional technical analysis argument for a sell with stochastic indicating potential short-term overbought conditions. With a daily ATR of around 80 pips, the bottom of the consolidation range is a reasonable target within the next few sessions if the economic numbers are a big enough surprise.
For the bulls, you may want to wait for the catalysts tomorrow, and if they disappoint, a break above 1.3350 or reversal buy patterns around the previous support area (1.3270) is the scenario to watch for a potential long position. Again, the daily ATR is wide enough to give this pair room to breath and maybe even get a 1:1 return-on-risk within a few trading sessions if volatility stays up.
