Greenback slumps, Canadian dollar about to shine?
“Greenback experienced weakness across the board as hope for an aggressive Fed diminishes.”
US dollar met with fresh supply as investors reassess recent data from the United States. After CPI came in weaker-than-expected for July, investors trimmed their bets for a larger 75 basis point rate hike during September. Moreover, as US Treasury yield begins to tone down, capital outflow accelerates, with demand shifting towards other risky assets. On the other hand, commodity-linked Canadian dollar extended gains as oil prices stages its rebound from the downside.
Quick recap of USDCAD
Long-term structure of USDCAD remains intact as it continues to trade within the ascending channel.
USDCAD Weekly Technical Analysis
From weekly perspective, the pair shows some signs of an extended retracement as MACD forms bearish crossover.
USDCAD Daily Technical Analysis
From daily perspective, the pair is currently testing near the 200-MA line, the key determination of downside bias.
ORDER: SELL STOP
STOP LOSS: 1.2880
Target 1: 1.2540
Target 2: 1.2500
ZFX Analyst’s Comment
While the pair is expected to extend its gains in the long-term, recent price action suggests short-term weakness ahead. Nonetheless, confirmation towards such bias could only be obtained after a successful close below the 200-MA line in daily perspective.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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