USDCAD Targeting A Test of 1.3330
Technical & Trade View
USDCAD
Bias: Bullish Above Bearish below 136.50
Technicals
Primary resistance is at 1.3600/50
Primary pattern objective is 1.3330
Acceptance below 1.3460 next pattern confirmation
Acceptance 1.3660 opens a test of 1.3710
20 Day VWAP bearish , 5 Day VWAP bullish
Notes
US CPI released today, volatility expected around the print
Goldman Sachs expects ‘a below-consensus 0.44% increase in core CPI in October (vs. 0.5% consensus), which would lower the year-on-year rate to 6.46% (vs. 6.5% consensus). We expect moderate increases in both food and energy prices to raise headline CPI by 0.49% (vs. 0.6% consensus), which would lower the year-on-year rate to 7.8% (vs. 7.9% consensus)'
Going forward Goldman 'expect monthly core CPI inflation to remain in the 0.3-0.4% range for the next couple of months before edging down to 0.2-0.3% next year. We forecast year-over-year core CPI inflation of 6.2% in December 2022, 3.3% in December 2023, and 2.7% in December 2024. The deceleration we expect in 2023 is driven more by goods than services categories'
According to Scotia Bank 'positioning (among speculative, leveraged accounts and real money investors) could help propel the CAD higher. Combined CFTC positioning data shows a relatively large net CAD short has been maintained among these market participants in recent weeks and the CAD’s rebound risks forcing these accounts to cover, adding further fuel to the CAD rebound’
USDCAD
Bias: Bullish Above Bearish below 136.50
Technicals
Primary resistance is at 1.3600/50
Primary pattern objective is 1.3330
Acceptance below 1.3460 next pattern confirmation
Acceptance 1.3660 opens a test of 1.3710
20 Day VWAP bearish , 5 Day VWAP bullish
Notes
US CPI released today, volatility expected around the print
Goldman Sachs expects ‘a below-consensus 0.44% increase in core CPI in October (vs. 0.5% consensus), which would lower the year-on-year rate to 6.46% (vs. 6.5% consensus). We expect moderate increases in both food and energy prices to raise headline CPI by 0.49% (vs. 0.6% consensus), which would lower the year-on-year rate to 7.8% (vs. 7.9% consensus)'
Going forward Goldman 'expect monthly core CPI inflation to remain in the 0.3-0.4% range for the next couple of months before edging down to 0.2-0.3% next year. We forecast year-over-year core CPI inflation of 6.2% in December 2022, 3.3% in December 2023, and 2.7% in December 2024. The deceleration we expect in 2023 is driven more by goods than services categories'
According to Scotia Bank 'positioning (among speculative, leveraged accounts and real money investors) could help propel the CAD higher. Combined CFTC positioning data shows a relatively large net CAD short has been maintained among these market participants in recent weeks and the CAD’s rebound risks forcing these accounts to cover, adding further fuel to the CAD rebound’
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