Top Story

USD/CAD faces key test ahead of OPEC, BOC and NFP

The volatility for the USD/CAD is likely to remain elevated for a while, providing plenty of trading opportunities. After today’s key OPEC decision, we will have the Canadian jobs data tomorrow, followed by a rate decision from the Bank of Canada on Wednesday and then the latest US nonfarm payrolls report next Friday.

As are as today is concerned, the falling Canadian dollar suggests FX market speculators are positioning themselves up for a slide in the price of oil. OPEC and non-OPEC oil producers such as Russia are meeting in Vienna and are likely to agree in extending crude output cuts until the end of 2018 in order to clear the global glut of oil. Speculators are wary of the inclusion of a clause providing for a review of the cuts at the next meeting, with a possible option of exiting the deal earlier if the market overheats. If this turns out to be the case, there is a possibility oil prices could fall sharply given their recent bullish run in the run-up to the OPEC meeting in anticipation of the cuts being extended. In other words, profit-taking is a strong possibility after OPEC’s decision is announced.

The drop in the Canadian dollar has lifted the USD/CAD pair to the key 1.2900-1.2935 resistance range again. Any clean break above here could potentially pave the way for a run towards the key 1.30 hurdle and possibly 1.3150 thereafter, which is an untested broken support level. On the other hand, if the above-mentioned resistance holds then price may drop towards the next support, which comes in at around 1.2820. If this level breaks down, then we could see a sharp move lower and the bias would turn bearish in the event the last low prior to the latest rally at 1.2680 also gives way.

Source: eSignal and FOREX.com.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

The markets are moving. Stop missing out.

OPEN AN ACCOUNT