Another dose of nervousness has hit USD/CAD traders as the currency pair tests short-term highs and is within grasp of apex values seen in the middle of April.
- Yesterday’s GDP numbers from Canada came in below expectations, which essentially put the Bank of Canada into the same difficult position the U.S Federal Reserve is battling.
- Slower growth is hitting Canada while inflation remains elevated. Later today the U.S Fed will issue its FOMC Statement but no change to U.S interest rates will take place.
The USD/CAD has responded to yesterday’s weaker growth numbers from Canada and concerns the U.S is facing stagflation with more buying of the currency pair. As of this morning the USD/CAD is testing the 1.37770 ratio which is a weekly high and beginning to challenge values seen from the 15th until the 19th of April. Nervous financial institutions are certainly bracing for the potential of a cautious U.S Federal Reserve which is not going to be able to deliver an interest rate cut in the mid-term and potentially into the fall of this year.
Short-Term Wagers as Volatility is Promised in the USD/CAD
Day traders with a taste for excitement can certainly participate in the USD/CAD today, but they have to acknowledge the price range of the currency pair will grow large and become volatile before the Fed releases its FOMC Statement and while the Fed Press Conference is taking place. Speculators are encouraged to use take profit orders to cash out potential winnings before they vanish with quick reversals which may be seen.
The 1.380000 level up above may look like a legitimate target for traders who believe more nervousness will enter the Forex market today. However, the rapid pace of the USD/CAD will make it dangerous to embark on wagers and stop loss orders will be needed in case the Fed sounds optimistic and convinces financial institutions that better days are ahead. Traders should not get overly ambitious regarding higher technical realms.
Top Forex Brokers
Price Velocity in the USD/CAD
Yesterday’s penetration upwards of the 1.37000 level saw price velocity develop quickly. Traders were able to brush aside resistance levels easily and demonstrate that technical ratios were rather vulnerable. Speculators have had to deal with extremely choppy conditions in the USD/CAD the past four months and this is not going to change suddenly.
- The U.S will publish Non-Farm Employment Change numbers on Friday and Average Hourly Earnings will also be seen at that time.
- Traders who want to take advantage of swift price action today will need to remain alert.
- The use of entry orders might be hard to use because of swift Forex movement in the USD/CAD later today, but they might prove useful to guard against price fills that do not match expectations.
Canadian Dollar Short Term Outlook:
Current Resistance: 1.37800
Current Support: 1.37670
High Target: 1.38350
Low Target: 1.37490
Ready to trade our Forex daily analysis and predictions? Here are the best Canadian online brokers to start trading with.