USD/CAD - H4
Last month was its first negative one since May and despite a solid start in November, the pair is range-bound this week and lacks conviction, as investors appear to wait for the US CPI inflation data on Wednesday.
Competing forces seem to be in play, with the USD pressured, but cautious sentiment and subdued oil prices keep the pair constrained. There is a recent short-term negative tilt below EMA200, which is also reflected in the RSI and could lead to a test of 1.2400. The November lows are probably distant at this stage though (1.2360-51), while the downside seems well protected from there on.
On the other hand, the RSI bounces off the 50 line and USD/CAD stays above the 23.6% Fibonacci of the mid-September/mid-October decline. This can carry the recovery towards the 38.2% Fibonacci (1.2520-6), although the 200Day EMA (at around 1.2570) will require more effort.
From the economic calendar, we expect US Producer Price Index shortly, followed by speeches from the heads of the Fed and the BoE, while US CPI inflation is due tomorrow.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.