USD/CAD Daily Forecast – Traders Eye the Critical Canadian Q2 GDP

Notably, the USD/CAD pair was trading within the 1.3273/1.3319 range level for the last two days in a row. Even today, the pair was consolidating in the same manner after marking day’s opening near 1.3283 level.

Finally, the Crude prices slipped on Friday after three consecutive positive sessions. Anyhow, the hurricane in Florida, a drop in the US stocks, and lowered trade tensions kept the Oil prices uplifted.

eikon
eikon

“It is very difficult to predict the sudden twist and turns in the Sino-US trade backdrop,” said Samuel Siew, investment analyst at Phillip Futures in Singapore.

Significant Economic Events

Last day, the market had witnessed the US Q2 QoQ GDP data release that came lower than the previous figures. Today, the market participants await the Canadian Q2 QoQ Annualized GDP data. The Street analysts expect this crucial GDP figure to record a whopping 3.0% over the previous 0.4%. Hence, if the actual reports happen to remain in-line with the market forecasts, then that would slice off pair gains. Meantime, few low volatile CAD-specific data releases like the Industrial Product Price and Raw Material Price Index might try to catch traders’ attention.

On the USD side, August Chicago Purchasing Managers’ Index and Michigan Consumer Sentiment Index might attempt to tweak the pair’s daily price actions.

Interim, Baker Hughes US Oil Rig Count would come out at around 17:00 GMT. This Crude data report release might have a direct impact on the Oil prices and an inverse effect on the Loonie pair.

Technical Analysis

1-Day Chart

On the daily chart, the Loonie pair appeared to linger inside the upper vicinity of the Bollinger Bands, sustaining a strong uptrend.

USDCAD 1 Day 30 August 2019
USDCAD 1 Day 30 August 2019

Anyhow, if the pair slips below the center line of the Bollinger Bands, then that would trigger a trend reversal. Quite notably, the USD/CAD pair continued to showcase a choppy performance since mid-August. The Relative Strength Index was just above the 50 mark, signaling a weak market interest. Also, the Average Directional Index (ADX) was indicating 13.73 level, which stands lower than the 20 range-bound benchmark. Therefore, such weak ADX value forecasts higher chances of range-bound performance to remain in the upcoming sessions.

3-Hour Chart

On the 180-Min chart, the Bollinger Bands seemed to shrink, signaling the dampening of volatility in the price actions. Though the pair stays in the upper region of the Bands, the bulls appear to lack the desired momentum to make a strong move.

USDCAD 180 Min 30 August 2019
USDCAD 180 Min 30 August 2019

Meanwhile, the MACD lines were taking a straight-line path, showing inadequate strength in the bulls. Nevertheless, the Stochastic Oscillator was pointing to the north, aiming to reach the overbought conditions. On the upper side, robust resistances remained stalled near 1.3315 and 1.3339 levels.

Click Here to start trading.

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets (www.easymarkets.com)

Bitcoin Tech Analysis – Recap and Mid-Day Review – 18/08/19

Bitcoin declined by 1.36% on Saturday. Reversing a 0.44% gain from Friday with interest, Bitcoin ended the day at $10,228.

A bearish start to the day saw Bitcoin fall to an early morning low $10,237 before finding support. Steering clear of the first major support level at $9,908, Bitcoin recovered to a late morning intraday high $10,494.7.

Despite the morning rebound, Bitcoin came up short of the first major resistance level at $10,699.

A broad-based crypto sell-off ultimately weighed, however, with Bitcoin sliding to a late afternoon intraday low $10,004.

Bitcoin managed to steer clear of sub-$10,000 levels and the first major support level at $9,908 in the afternoon sell-off.

Support late in the day led to a move back through to $10,200 levels to limit the downside on the day.

For the Bitcoin bulls, the near-term bullish trend, formed at mid-December’s swing lo $3,215.2 remained intact. Bitcoin continued to find support at the 38.2% FIB of $9,734.

The downside on the day was the 6th in 9-days, however, leaving Bitcoin down by 11.64% for the current week. For the current month, Bitcoin was up by 1.39%. This week’s losses offset a particularly bullish start to the month that saw Bitcoin strike $12,000 levels.

On a rollercoaster of a day, Bitcoin’s market cap slid from a high $186.81bn levels to a day low $180.56bn. At the time of writing, Bitcoin’s market cap stood at $182.39bn, well below $205bn levels at the start of the week.

Bitcoin’s first hold onto $10,000 levels since Tuesday supported Bitcoin’s dominance, which continued to hold at 68% levels.

This Morning

At the time of writing, Bitcoin up by 0.01% to $10,229. A bullish start to the day saw Bitcoin strike an early morning intraday high $10,280 before hitting reverse.

Falling short of the first major resistance level at $10,480.47, Bitcoin fell back to a morning low $10,086 before finding support.

Steering clear of the first major support level at $9,989.77, Bitcoin move back through to $10,200 levels to reverse the early losses.

BTC./USD 18/08/19 Daily Chart

For the Day Ahead

A move back through to $10,250 to $10,300 levels would bring the first major resistance level at $10,480.47 into play.

Bitcoin would need the continued support of the broader market, however, to break through to $10,300 levels.

In the event of a broad-based crypto rally, Bitcoin would likely visit $10,560 levels reached on Friday before any pullback.

Barring a crypto breakout, Bitcoin would likely come up short of the first major resistance level at $10,480.47 and Saturday’s high $10,494.7.

Failure to move back through to $10,250 levels would likely leave Bitcoin in the red on the day.

A slide back through the morning low $10,086 would see Bitcoin test the first major support level at $9,989.77.

Barring a crypto meltdown, Bitcoin should avoid sub-$9,800 levels and the 38.2% FIB of $9,734.

Looking at the Technical Indicators

Major Support Level: $9,989.77

Major Resistance Level: $10,480.47

23.6% FIB Retracement Level: $11,275

38.2% FIB Retracement Level: $9,734

62% FIB Retracement Level: $7,245

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets (www.easymarkets.com)

Bitcoin Tech Analysis – Recap and Mid-Day Review

Bitcoin gained 2.56% on Thursday. Partially reversing a 7.72% slide from Wednesday, Bitcoin ended the day at $10,324.3.

A bullish start to the day saw Bitcoin strike an early morning high $10,249 before hitting reverse.

Falling well short of the first major resistance level at $10,660.4, Bitcoin tumbled to a mid-morning intraday low $9,522.

The sell-off saw Bitcoin slide through the 38.2% FIB of $9,734 and first major support level at $9,717.4.

With the morning sell-off a spill-over from Wednesday afternoon’s meltdown, support kicked in by late morning.

Bitcoin bounced back to a late intraday high $10,471 before easing back. Of significance was a move back through the 38.2% FIB of $9,734 to return to $10,000 levels.

In spite of the rebound, however, Bitcoin failed to test the first major resistance level at $10,660.4.

For the Bitcoin bulls, the near-term bullish trend, formed at mid-December’s swing lo $3,215.2 remained intact. Bitcoin continued to find support at the 38.2% FIB of $9,734.

The upside on the day was just the 2nd in 7-days and more importantly pulled Bitcoin back into positive territory for the current month.

On a rollercoaster of a day, Bitcoin’s market cap slid from $183bn levels to a day low $172.99bn before the rebound. At the time of writing, Bitcoin’s market cap stood at $177.14bn, easing back from $180bn levels late on Thursday.

Bitcoin’s brief return to $10,000 levels supported Bitcoin’s dominance to hold at 68% levels.

The morning sell-off coincided with the risk aversion through the Asian session on Thursday, with the equity markets responding to China’s comments on trade.

A shift in sentiment across the global financial markets through the day also coincided with the cryptomarket rebound.

Once again the correlation between the equity and crypto-asset classes was evident, discounting Bitcoin’s safe-haven status.

This Morning

At the time of writing, Bitcoin was down by 4.27% to $9,883.9. A bullish start to the day saw Bitcoin strike an early morning high $10,437 before hitting reverse.

Falling short of the first major resistance level at $10,689.53, Bitcoin slid to a mid-morning low $9,800.

In spite of the sell-off, Bitcoin steered clear of the first major support level at $9,740.53 and 38.2% FIB of $9,734.

BTC/USD 16/08/19 Daily Chart

For the Day Ahead

A move back through to $10,100 levels would signal the start of the recovery of the morning losses.

Bitcoin would need the support of the broader market, however, to break through to $10,000 levels.

Barring a broad-based crypto rally, Bitcoin will likely continue to fall short of the first major resistance level at $10,689.53.

This morning’s high $10,437 and Thursday’s high $10,471 would likely cap any upside on the day.

Failure to move back through to $10,100 levels would likely see Bitcoin close out the day in the red.

A fall through the morning low $9,800 would bring the first major support level at $9,740.33 and 38.2% FIB of $9,734 into play.

Barring a crypto meltdown, Bitcoin should steer clear of sub-$9,600 levels visited on Thursday.

In the event of an extended sell-off through the day, Bitcoin would likely test the second major support level at $9,156.77.

Go to the web site and start Cryptocurrency Trading Today

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets (www.easymarkets.com)

USD/CAD Daily Forecast – Green Ichimoku Clouds Questioning the Downturn

After marking the day’s opening near 1.3145 level, the Loonie pair was quite reluctant to make a positive move. Laterwards, the pair attempted to make a bounce off from the 1.3133 support handle. Anyhow, the strong resistance conflux made up of the 200-day, and 100-day SMA put a lid over the pair’s gains. Notably, from there, the pair retook a downturn and this time even breached the 1.3133 support mark.

Symmetrical Triangle in Play for DXY

US Dollar Index 240 Min 25 July 2019
US Dollar Index 240 Min 25 July 2019

Meantime, two days back, the US Dollar Index had already showcased a breakout from the 1-month old symmetrical triangle. Such a rigorous price action alludes for some upcoming strong bullish movements. Today, the Greenback was underway to climb new heights. On the upside, the next resistance points stand near 97.92 and 98.29 levels.

Crude: SMAs Confining Upside

OIL 240 Min 25 July 2019
OIL 240 Min 25 July 2019

On the Crude price chart, the 50-day SMA appeared to head southwards after crossing the 100-day SMA, making a Death Cross. This near-term SMA might soon encounter and move below the 200-day SMA, transferring powers to the bears. From the fundamental side, the Middle East tensions continued to impact the commodity’s prices with a weak demand outlook under play.

Significant Economic Events

The US economic docket outweighs with high volatile June Durable Goods and Unemployment data releases.

The most significant June Non-defense Capital Goods Orders that excludes Aircraft will come out at around 12:30 GMT. The market stays bearish over this data release, expecting a 0.3% slump over the previous 0.5%. Also, the Street analysts expect the Continuing and Initial Jobless Claim computed for the last week, to report higher than their respective previous figures.

Today, the Canadian economic docket remains quite light-weighted amid lack of significant events. Also, the market won’t find any oil catalyst events like EIA or API Crude data reports today, to tweak the Crude prices.

Technical Analysis

4-Hour Chart

USDCAD 240 Min 25 July 2019
USDCAD 240 Min 25 July 2019

The significant 200-day SMA continued to cap the USD/CAD gains even today. On the downside, strong confluence consisting of the 50-day and 100-day SMA stands firm, acting as a stable support region. However, if the pair slips below this aforementioned support vicinity, then that would flash on the seller’s territory. Notably, the histograms of the MACD technical indicator were tending to point southwards, as a prelude to a bearish trend.

1-Hour Chart

USDCAD 60 Min 25 July 2019
USDCAD 60 Min 25 July 2019

According to the Ichimoku Clouds technical indicator, the Loonie pair was underway to cross below the Green Clouds, staying inside it. At this point, the Clouds was playing the role of a support line. Nevertheless, the primary trend continued to remain bearish as the base line and conversion line hovered above the pair.

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets (easymarkets.com)

USD/CAD Daily Forecast – Major Counter Trendline to Cap Daily Gains

A robust rally had taken the pair to the upside 1.3120/1.3160 range level on July 22. Since then, the pair had continued to stay intact within the same aforementioned range level without shedding any of the accumulated gains. Even today, the USD/CAD pair showcased a similar kind of performance after opening up near 1.3143 handle. Quite notably, in the Asian trading session, the pair breached and went above the resistance confluence consisting of the 50-day and 100-day SMA. Hence, the market can expect some solid moves out of the Loonie pair by the end of the day.

In the meantime, the oil prices went higher today following the release of upbeat API Weekly Crude data. This API data computed since July 19 recorded -10.961 million over -1.401 million. Other factors that supported the Crude price upliftment were the uprising tensions over Iran and positive signs on the US-Sino trade front. However, weaker demand-side kept the daily gains limited.

OIL 60 Min 24 July 2019
OIL 60 Min 24 July 2019

On the technical side, the Crude Oil WTI Futures was forming an ascending triangle, revealing rising buyer interest. Hence, at any point in time, the Crude prices might execute a breakout, allowing the bulls to conquer new heights.

Influential Economic Events

The Canadian economic docket remains quite silent amid lack of significant events for today. However, the US PMI figures and New Homes Sales data would make attempts to influence the pair’s daily price actions.

This time, the market stays bullish over the US Markit Manufacturing and Services PMI. Anyhow, the Street analysts expect the June MoM New Home Sales data to drop 34K this time.

On the Crude front, traders anticipate the EIA Crude Oil Stocks Change computed since July 19. The consensus estimates the Crude Inventories to report near -4.011 million over the previous -3.116 million.

Technical Analysis

1-Day Chart

The USD/CAD continued to follow the almost 2-month old counter trendline. Last week, the 50-day short term SMA appeared to cross and move below the significant 200-day long term SMA, forming a Death Cross. Hence, bears might overweigh bulls in the upcoming sessions.

USDCAD 1 Day 24 July 2019
USDCAD 1 Day 24 July 2019

However, market attention might shift towards the overhead SMA conflux if the pair breaches the aforementioned major counter trendline. Also, the RSI remained quite flat near 50 mark, showing neutral buyer enthusiasm.

3-Hour Chart

On moving towards a smaller time frame, one can see the earlier mentioned major counter trendline.

USDCAD 180 Min 24 July 2019
USDCAD 180 Min 24 July 2019

If the pair makes an additional growth in the price actions today hitting the counter trendline, then the pair should rebound and head downwards. Also note that at any point in time, the overbought RSI might play its role, dragging down the pair, taking it to the seller’s territory.

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets (www.easymarkets.com)

Futures Rise as China Takes Steps Towards Trade War Resolution

Futures Point to a Slightly Higher Open

The Wall Street Journal reported that China is ready to settle its trade dispute with the US. However, Chinese President Xi has some terms to present to President Trump.

China wants the US to lift its ban on the sale of US technology to telecommunications company Huawei Technologies Co. Another condition is for the US to remove all punitive tariffs and stop efforts to get China to buy more US exports than previously agreed.

Treasury yields have been range bound for most of the week with the 10-year yield continuing to range just about 2%. Gold prices have been drifting lower since hitting multi-year highs earlier in the week. The yellow metal was last seen hovering around the psychological $1400 for a second consecutive session.

US GDP Rose an Annualized 3.1% in the First Quarter

The third reading of US GDP came in as expected, at an annualized 3.1% for the first quarter. Unemployment claims were a bit higher than expected, with seasonally adjusted initial claims at 227,000 last week. Analysts called for 220,000 claims. Pending home sales are scheduled for release shortly after the market open.

Oil prices are diverging somewhat from the well-known correlation with equities. WTI Crude oil is down 0.4% at the time of writing. Some technical resistance is in play as both the 100 and 200-day moving averages are interesting right around where the instrument currently trades.

The S&P 500 is down on the week, and has erased about three-quarters of last week’s gains in the week thus far. The index stalled out briefly trading at fresh record highs last week.

The Federal Reserve provided a catalyst for downside pressure in equities following two Fed member speeches earlier in the week. The speeches readjusted market expectations for easing measures in the United States. Ahead of the speeches, speculation had been growing that the central bank will cut 50 basis points in July.

European Indices Mixed at Midday

The German Dax is up ahead of the US market open, however, the UK FTSE, French CAC 40, and Euro Stoxx 50 are all in the red. Volatility has been subdued for most of the week and all indices are trading not too far from where they started the week out.

Inflation figures out of Spain came in softer than expected. The National Statistics Institute reported year over year CPI to rise 0.4% in the flash reading versus an analyst estimate of 0.8%. It was the second consecutive report where the figure fell short. The consumer price index in Spain has been on a steady decline after topping at 2.3% around summer time last year.

Consumer prices in Germany were reported to rise ahead of expectations. Destatis showed preliminary CPI rising 0.3% in June, ahead of an expected rise of 0.2%. The figure was

Asian Equities Rebound

The Japanese Nikkei rebounded sharply on Thursday, closing for a gain of 1.19% on the day. The index is in green territory for the week following today’s rise. However, it remains within the limits of a broader three-week range.

A weaker Japanese yen boosted the Nikkei as USD/JPY crossed above the 108 handle in early day trading. Despite a pullback in the currency pair back below the psychological price point, the yen remains the weakest major currency in the day thus far.

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets

Read easyMarkets review

Futures Weighed by Geopolitical Tensions, Upcoming Fed Speeches in Focus

US Equity Futures Point to a Slightly Lower Open

The front-month contract of the S&P 500 edged lower ahead of the market open, shedding about $4 and pointing to a soft open. Volatility has declined in the early week as the S&P 500 faces resistance that triggered a notable decline in the prior two tests of it. As well, investors await the G20 meeting later this week in anticipation of progress in trade wars between the United States and China.

A catalyst for volatility in the session ahead may come from Fed speeches. Specifically, Fed member Bullard and Fed Chair Powell will speak later today. With the futures markets fulling pricing in at least one rate cut in July, the central bank and the market view of US monetary policy have diverged a great deal.

Powell will have an opportunity to set the record straight, whether that is a confirmation of a rate cut next month, or to try and set a less dovish tone for the markets. The later scenario stands to cause a significant drop in equities considering where market expectations are regarding US monetary policy.

Bullard’s speech will also tend to be important. Recall that he was the sole dissenter at the June meeting and had wanted to cut 25 basis points then. He might be able to offer a backdrop as to what it will take for a July cut.

European Stocks Trying to Pare Gains at Midday

The German Dax opened at five-day low as geopolitical tensions weighed. However, the index has recovered early day losses to trade relatively unchanged on the day. European, French and the UK indices portrayed similar price action, recovering higher to erase most of the decline as a result of a weak open.

Boris Johnson announced once again his commitment to pulling the United Kingdom out of the EU by Halloween. Johnson holds a hard stance on a no-deal Brexit, if it is needed to proceed with an EU exit.

Johnson clarified that an attempt will be made to make a deal. However, if one cannot be made, the UK will leave with a no-deal. He indicated that there are technical ways around the Irish backstop. He also added that he has some creative methods for the UK to pay the $50 billion exit fee.

Asian Markets Slip on US-Iran Tensions

Equity markets in Asia mostly fell lower on Tuesday. The Japanese Nikkei shed 0.42% as the yen strengthened to a five-month high versus the greenback. The Hang Seng index posted the largest loss, declining 1.15% on the day. Meanwhile, India’s Mumbai Sensex was the strongest, gaining 0.8%.

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets (www.easymarkets.com)

No Longer Patient, The FOMC Hints at Rate Cuts

FOMC Rates Are Virtually Assured In 2019

The FOMC exceeded the market’s expectations on Wednesday. The market had been expecting a dovish turn of phrase but not quite the downshift in outlook the Fed delivered. The FOMC left its policy unchanged but hinted at future rate cuts this year. These hints, accompanied by a near 0.5% downgrade in the average members 2019 target rate, have virtually assured a rate cut will happen next month.

The Fed’s reasoning is simple, there are growing domestic and global risks to economic growth. Those risks are having an effect on activity, U.S. economic expansion is still underway but the pace of acceleration is slowing. Inflation data at all levels suggests cooling in the economy. If it cools too much more the Fed may be forced to act aggressively in support of expansion. The CME’s Fed Watch Tool is pricing in at least one cut next month and the odds for two are rising.

The Case For Lower Rates Is Building

Most FOMC members lowered their outlook for interests by at least a half percent. Despite this downshift, the general consensus remains no rate cuts this year but more cuts next year. Powell, in his remarks, says the case for lower rates is building which the market took to mean weak data would push the Fed to act at the next meeting. Today’s Philly Fed MBOS manufacturing survey shows growth in the sector slowed to near zero, another indication lower rates are needed.

The yield on the ten-year Treasury fell in response to the news. The rally in bonds sent the yield below 2.0% for the first time in over three years. The move deepened the yield-curve inversion and raised the chance of future economic recession. The dollar weakened considerably following the Fed’s release. It shed more than 1.0% in under 24 hours.

There Is Risk To The Outlook

The biggest risk to the U.S. economy and the FOMC outlook is global trade relations. With trade relations in doubt and economic activity slowing interest rate cuts look all but assured. The risk in trade, however, is two-edged. While souring relations have had a negative impact on economic activity improving relations will do the opposite.

There is little expectation Trump and Xi will reach a deal in the near-term there are indications there is still hope for a deal this year. Both sides have indicated, with optimism, that talks between the two are planned for the G-20 meeting. Any positive development in trade relations will be a catalyst for activity and that may be enough to keep FOMC rate-cuts at bay.

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets

Bitcoin Breaks Out, the Bull Market is in Full Swing

Bitcoin Prices Top $9,000, Traders Eye On $10,000

Bitcoin prices topped $9,000 last week and put the token on track to move higher in the near-term. The move resulted in the breakdown of a significant resistance level that had been keeping prices in check. Now that resistance is broken down prices are likely to keep rising but just how far can they go? Simple technical targets based on the peaks set in 2018 suggest $10,000, $12,000, and $16,000 are logical targets.

Projecting technical patterns like the run-up to, and subsequent break of resistance at $8,500 gives an equally optimistic target. The magnitude of that move is $5,300, projecting it from the $8,500 resistance line gives a target near $14,000. Momentum is slowing winding down but that is not a concern at this time. momentum remains firmly bullish and is likely to remain so for the foreseeable future. At current levels, the MACD histogram could take several months to wind down to zero and in that time BTC may have already surpassed its all-time highs.

This Is What’s Driving The Rally In Bitcoin

There are several factors driving the rally in Bitcoin. Yes, Facebook’s launch of Libra is helping to support prices but no, it isn’t really that important to Bitcoin other than as a sign of growing acceptance of blockchain technology. The two things that are driving Bitcoin’s price higher is next year’s scheduled halving and this summer’s launch of Bakkt physically-settled Bitcoin futures.

The halving is an important event for Bitcoin as it will significantly reduce the number of available tokens. The halving is when the mining reward for Bitcoin is cut in half. After the halving, which occurs next May, each block will only be worth 6.5 Bitcoins. Because the cost of mining will remain the same this means the fundamental value of BTCs all over the world will increase.

Bakkt and its launch of BTC futures are important for two reasons in and of itself. First, physically settled BTC futures will increase the volume of Bitcoin trading and that will aid its liquidity. Second, Bakkt is an SEC-approved trading venue. Now that it is cleared to test its futures products we are one step closer to a BTC ETF. The approval of a BTC ETF will be a game-changing event for Bitcoin.

What we can expect from the price of Bitcoin over the next few months is this. A steady increase in prices punctuated by periodic tests of resistance and minor consolidations. This should continue up to and until BTC reaches its all-time high. Once BTC reaches its all-time high I see a flood of new money come into the market that may push it up to $50,000 within the next two years.

The article was written by Anthony Darvall, Chief Market Analyst at easyMarkets