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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:

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

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.