USD/CAD Forecast: Canadian dollar subdued on light data

Kenny Fisher MarketPulse

USD/CAD has ticked higher in the Tuesday session. Currently, the pair is trading at 1.3255, up 0.12% on the day. There are no Canadian events, and the sole U.S. indicator is a minor housing report. On Wednesday, the FOMC releases the minutes of its January policy meeting.

Traders should treat the Federal Reserve minutes as a market-mover. All eyes will be on the Federal Reserve on Wednesday, with the release of the minutes of its most recent meeting. The Fed acted aggressively in 2018, boosting rates four times in order to keep the red-hot U.S. economy from overheating. Since raising rates in December, however, the Fed has changed direction and become much more dovish. In late 2018, there was talk of up to four rate hikes in 2019, but the Fed has revised its forecast to two hikes. The markets have gone further, projecting no rate increases this year, and there has even been talk of a rate cut in late 2019. In the January rate statement, the Fed discarded previous pledges of “further gradual increases” in interest rates, and said it would be “patient” before any further hikes.

Is the U.S. economy slowing down? There are concerns about the strength of the economy, after soft consumer data in January. Retail sales and core retail sales showed sharp contraction, and these numbers came on the heels of soft inflation indicators. Inflation remains low, despite a strong labor market. CPI showed no change in January and has failed to post a gain since November. Core CPI has recorded weak gains of 0.2% for four successive months. On an annualized basis, CPI gained 1.6% in January, the weakest year-over-year gain since mid-2017. The soft inflation numbers were a result of low energy prices, which fell 3.1% in January as oil prices remain under pressure.

Markets in long-weekend slumber

Regional markets to have their say on President’s Day

USD/CAD Fundamentals

10:00 US NAHB Housing Market. Estimate 59
14:00 US FOMC Meeting Minutes

Open: 1.3240 High: 1.3263 Low: 1.3234 Close: 1.3255

USD/CAD Technical

S3	S2	S1	R1	R2	R3
1.3049	1.3125	1.3200	1.3290	1.3383	1.3445

USD/CAD ticked higher in the Asian session and is steady in European trade

1.3200 is providing support
1.3290 is the next resistance line
Current range: 1.3200 to 1.3290

Further levels in both directions:

Below: 1.3200, 1.3125 and 1.3049
Above: 1.3290, 1.3383, 1.3445 and 1.3547

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.