Canadian Dollar Down on CPI and Yields as Risk Turns Off. Will USD/CAD Keep Rising?

Canadian Greenback, US Yields, Crude Oil, NZD/USD, AUD/USD – Speaking Factors

  • The Canadian Greenback obtained hit by bond merchants’ expectations being disillusioned
  • APAC equities have been listless, undermined after a risk-off sentiment lead from the US
  • Crude oil fell, gold held and commodity currencies softened.The place to for USD/CAD?

The Canadian Greenback dropped after CPI hit expectations. This disillusioned home bond bears and charges there went decrease to assist CAD depreciation. Canadian 10-year authorities bond yields went from a excessive of 1.81% to a low of 1.69%.

US yields additionally dragged decrease, with 10-year Treasuries backing away from a excessive of 1.65% to commerce at 1.58% at one stage. 30-years went from above 2.04% to commerce beneath 1.97%.

With yields heading south, gold discovered some lustre and held the positive factors from the US session in Asia.

US equities gave APAC shares a smooth lead as they closed down a bit in a single day after some earnings misses. Mainland China’s CSI 300, Hong Kong’s Hold Seng Index (HSI) and Japan’s Nikkei 225 have been weaker. Australia’s ASX 200 index completed barely up.

With equities sliding and development belongings wanting much less rosy, crude oil slid decrease within the US session and continued decrease by way of the far east. Hypothesis continued to swirl concerning the US dipping into its Strategic Petroleum Reserve.

As well as, OPEC+ have beforehand mentioned that they consider manufacturing will likely be considerably increased into the sooner a part of 2022. A report in a single day from the US Power Info Administration (EIA) concurs with this outlook.

The Australia and New Zealand {Dollars} have been bought in a single day with different threat belongings however have been the higher performers in Asia at the moment.

The Kiwi obtained a lift from the Reserve Financial institution of New Zealand’s inflation expectations knowledge hitting a 10-year excessive. This led to hypothesis of a 50-basis level hike from the RBNZ subsequent week.

Wanting forward, there are a selection of ECB and Fed audio system, in addition to US jobless claims knowledge.

USD/CAD Technical Evaluation

USD/CAD has rallied by way of the earlier excessive of 1.26046 and the ten, 55 and 200-day easy transferring commons (SMA) may be about to sign additional bullish momentum.

A bullish triple transferring common (TMA) formation requires the worth to be above the quick time period SMA, the latter to be above the medium time period SMA and the medium time period SMA to be above the long run SMA. All SMAs additionally have to have a optimistic gradient.

There are two excellent necessities for a bullish TMA in USD/CAD. The ten-day SMA must be above the 55-day SMA and the gradient of the 200-day SMA wants to show to optimistic. If the worth stays above the 10-day SMA, this may increasingly unfold.

Resistance may very well be on the earlier highs of 1.27746, 1.28963 and 1.29492. On the draw back, potential assist might lie on the pivot level of 1.24936 or the prior lows of 1.23873, 1.22885 and 1.22518.


Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the feedback part beneath or @DanMcCathyFX on Twitter


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