4 Sep 2013
Overbought USD/CAD hits upside target at 1.0555; starts pullback ahead of BOC
FXstreet.com (Barcelona) - The strong US Dollar recently has brought the USD/CAD up to its projected upside target at 1.0555 as traders await tons of data this week – including the Bank of Canada’s interest rate decision Wednesday.
USD/CAD due for a modest correction ahead of BOC announcement
The torrid, tapering-related rally in the US Dollar has pushed the USD/CAD all the way up to Elliott Wave-generated resistance at 1.0555. Now overbought, the cross appears to be due for a mild pullback. But, will the Bank of Canada indicate enough hawkishness with its decision / policy statement that a pullback will occur?
Here’s the rest of the week’s schedule for USD/CAD traders:
• Wednesday: US Trade Balance; Bank of Canada rate decision; US Fed Beige Book; Fed’s Dudley speaking
• Thursday: Fed’s Kocherlakota speaking; US ADP Employment Change; US Weekly Jobless Claims; US Non-Farm Productivity & Labor Costs; US Factory Orders; US ISM Non-Manufacturing PMI
• Friday: Canadian Inflation Data; Canadian Employment Data; US Monthly Employment Report
Technical outlook for USD/CAD
As noted above, USD/CAD appears set for a fourth wave pullback with potential downside targets of 1.0490 and 1.0449. Once support is established and tested, another up leg should take place in USD/CAD. The upside target above the short-term high at 1.0559 will be at least 1.0606.
USD/CAD due for a modest correction ahead of BOC announcement
The torrid, tapering-related rally in the US Dollar has pushed the USD/CAD all the way up to Elliott Wave-generated resistance at 1.0555. Now overbought, the cross appears to be due for a mild pullback. But, will the Bank of Canada indicate enough hawkishness with its decision / policy statement that a pullback will occur?
Here’s the rest of the week’s schedule for USD/CAD traders:
• Wednesday: US Trade Balance; Bank of Canada rate decision; US Fed Beige Book; Fed’s Dudley speaking
• Thursday: Fed’s Kocherlakota speaking; US ADP Employment Change; US Weekly Jobless Claims; US Non-Farm Productivity & Labor Costs; US Factory Orders; US ISM Non-Manufacturing PMI
• Friday: Canadian Inflation Data; Canadian Employment Data; US Monthly Employment Report
Technical outlook for USD/CAD
As noted above, USD/CAD appears set for a fourth wave pullback with potential downside targets of 1.0490 and 1.0449. Once support is established and tested, another up leg should take place in USD/CAD. The upside target above the short-term high at 1.0559 will be at least 1.0606.