The Canadian Dollar is having a banner run as price continues to push away from the Mid-January peak in USD/CAD. At the same time that CAD has gained nearly 5% on the Japanese Yen & 4.25% on the EUR in the last 5-trading days, the price of WTI Crude Oil continues to push against significant price resistance around 34.50/bbl. The historical correlation of Oil & USD/CAD has diverged somewhat recently from its prior lock-step relationship, but they could pick back up if Oil’s rise could be seen benefitting the Canadian Economy and altering the Bank of Canada’s Monetary Policy. For our long-term Oil Outlook, check it out here.
Weekly USD/CAD Chart May Favor A Deeper Retracement Than Originally Expected
One development that continues to get little attention but appears to be very important to the direction of USD/CAD is the 2-yr yield spread between the United States & Canada. Today, the Canadian government printed a strong GDP YoY at 0.5% vs. exp of 0.0%, and the CAD strengthened further. At the same time, investors are wondering if the Federal Reserve will have to convince the markets that they do not intend to hike in 2016, which would further narrow the important 2-yr spread that has guided USD/CAD lower since mid-January. The 2-yr yield spread has narrowed from -60bp to -26.4 currently, which is a 3-month low in recent trading.
USD/CAD Has Broken Below 1.3400, And Price Now Faces The Q3 2015 Corrective Zone
Key Levels after the Plunge
We have cleared the prior key level support of the 100-dma at 1.3618. Now, the focus has turned to the 50% retracement of the May-January range. A break below ~1.3303 would align with what we see on Ichimoku, which is price breaking below the cloud that could spell more downside ahead. Below 1.3305, traders will start focusing on 1.3000. Hard to imagine we were pressing ever closer to 1.5000 less than 2 months ago.
As mentioned above, the further narrowing of the 2-yr yield curve could be a catalyst for the test of the 50% retracement of the May-January range at 1.3303, and the 61.8% of 1.2977 that would likely need a strong drop in the US Dollar to accomplish.
Canadian Dollar Rally is Set to Last per Sentiment
When looking at sentiment, crowd sentiment has moved positive providing favor for more downside. We use our Speculative Sentiment Index as a contrarian indicator to price action, and the fact that the majority of traders are net-long at a bull: bear 1.339 means a bearish USD/CAD signal is currently at play. How price reacted around the 100-dma has communicated a behavior shift is at work. A break below this key support metric and a move into positive territory on the SSI would favor further downside towards downside targets mentioned above.
Combining the technical picture above, with the sentiment picture, and the break below support of the long-term channel/ 100-DMA alongside a move higher in retail sentiment to net long against a potential new trend would further warn of more CAD gains ahead.
USD/CAD Speculative Sentiment Index as of 3/1/2016
Interested In Learning the Traits of FXCM’s Successful Traders? If So, Click Here
The Canadian Dollar is having a banner run as price continues to push away from the Mid-January peak in USD/CAD. At the same time that CAD has gained nearly 5% on the Japanese Yen & 4.25% on the EUR in the last 5-trading days, the price of WTI Crude Oil continues to push against significant price resistance around 34.50/bbl. The historical correlation of Oil & USD/CAD has diverged somewhat recently from its prior lock-step relationship, but they could pick back up if Oil’s rise could be seen benefitting the Canadian Economy and altering the Bank of Canada’s Monetary Policy. For our long-term Oil Outlook, check it out here.
Weekly USD/CAD Chart May Favor A Deeper Retracement Than Originally Expected
One development that continues to get little attention but appears to be very important to the direction of USD/CAD is the 2-yr yield spread between the United States & Canada. Today, the Canadian government printed a strong GDP YoY at 0.5% vs. exp of 0.0%, and the CAD strengthened further. At the same time, investors are wondering if the Federal Reserve will have to convince the markets that they do not intend to hike in 2016, which would further narrow the important 2-yr spread that has guided USD/CAD lower since mid-January. The 2-yr yield spread has narrowed from -60bp to -26.4 currently, which is a 3-month low in recent trading.
USD/CAD Has Broken Below 1.3400, And Price Now Faces The Q3 2015 Corrective Zone
Key Levels after the Plunge
We have cleared the prior key level support of the 100-dma at 1.3618. Now, the focus has turned to the 50% retracement of the May-January range. A break below ~1.3303 would align with what we see on Ichimoku, which is price breaking below the cloud that could spell more downside ahead. Below 1.3305, traders will start focusing on 1.3000. Hard to imagine we were pressing ever closer to 1.5000 less than 2 months ago.
As mentioned above, the further narrowing of the 2-yr yield curve could be a catalyst for the test of the 50% retracement of the May-January range at 1.3303, and the 61.8% of 1.2977 that would likely need a strong drop in the US Dollar to accomplish.
Canadian Dollar Rally is Set to Last per Sentiment
When looking at sentiment, crowd sentiment has moved positive providing favor for more downside. We use our Speculative Sentiment Index as a contrarian indicator to price action, and the fact that the majority of traders are net-long at a bull: bear 1.339 means a bearish USD/CAD signal is currently at play. How price reacted around the 100-dma has communicated a behavior shift is at work. A break below this key support metric and a move into positive territory on the SSI would favor further downside towards downside targets mentioned above.
Combining the technical picture above, with the sentiment picture, and the break below support of the long-term channel/ 100-DMA alongside a move higher in retail sentiment to net long against a potential new trend would further warn of more CAD gains ahead.
USD/CAD Speculative Sentiment Index as of 3/1/2016
Interested In Learning the Traits of FXCM’s Successful Traders? If So, Click Here
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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