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USD/CAD Fundamental Forecast – June 29, 2016

By:
Barry Norman
Published: Jun 28, 2016, 10:33 UTC

The USD/CAD dipped 89 points to 1.2982 as the US dollar ran out of stream and oil prices recovered a bit. USD/CAD has been capped by resistance found at

USD/CAD Daily Forecast

The USD/CAD dipped 89 points to 1.2982 as the US dollar ran out of stream and oil prices recovered a bit. USD/CAD has been capped by resistance found at 1.3085; the level reflects the spike high on June 16th. A breach higher sees another level of resistance at 1.3144, followed by 1.3380. The May highs at 1.3380 will be a crucial level in the pair, likely to have stop losses set above it. A breach above it would reinforce the view of a bullish breakout, and continuation from the leg up in early May.

In the event a pullback is seen from current levels, the first area of support is found at 1.2965, the level has been respected in most cases the exchange rate neared the area this year. The trend in the pair remains bullish from 2011, and a bullish engulfing monthly candle has been posted for the month of May. Bulls will want to see a strong appreciation over the next few days to close out the month of June. A monthly close at current levels would print a bearish hanging man formation, setting a bearish tone for July.

The after-effects of the British exit, commonly referred to as Brexit, have been even more pronounced because investors had not anticipated the “Leave” side to win.

“What we’re seeing is a bit of a knee-jerk reaction and also some unwinding of the gains in anticipation of a different outcome,” said Craig Fehr, a Canadian market strategist with Edward Jones in St. Louis.

Fehr said the continued decline is also a result of sellers who are still looking to flee their stock portfolios in favor of safer havens like gold.

“It’s reasonable to expect the market could find a bit of a base in the short term, but volatility is likely going to persist well into the summer,” he said.

The uncertainty that markets traditionally despise could weigh on stocks as the impact of Brexit unfolds in the next few months or potentially, years.

“There is no clear decisive playbook for how this is going to transpire,” said Fehr.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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Wednesday, June 29, 2016

Country Name Volatility Previous
Japan Large Retailer’s Sales 2 -0.8
Japan Retail Trade (YoY) 2 -0.8
Japan Retail Trade (MoM) 2 0
Australia HIA New Home Sales (MoM) 2 -4.7
Germany Consumer Confidence Survey 2 9.8
U.K. Financial Stability Report 2
U.K. Consumer Credit 2 1.287
U.K. Mortgage Approvals 2 66.25
Eurozone Economic Sentiment Indicator 2 104.7
Eurozone Business Climate 2 0.26
Eurozone Industrial Confidence 2 -3.6
Eurozone Consumer Confidence 2
Eurozone Services Sentiment 2 11.3
U.S. Personal Consumption Expenditures – Price Index (YoY) 2 1.1
U.S. Core Personal Consumption Expenditure – Price Index (MoM) 2 0.2
U.S. Personal Consumption Expenditures – Price Index (MoM) 2 0.3
U.S. Personal Income (MoM) 2 0.4
U.S. Personal Spending 2 1
U.S. Core Personal Consumption Expenditure – Price Index (YoY) 2 1.6
U.S. Pending Home Sales (MoM) 2 5.1
U.S. Pending Home Sales (YoY) 2 4.6

Government Bond Auctions

Date Time       Country           Auction

Jun 27 11:10 Italy Holds zero-coupon/BTPei auction

Jun 27 11:30 Germany Eur 1.5bn Jun 2017 Bubill

Jun 27 17:20 Italy Details of bond auction

Jun 28 N/A UK BoE Brexit referendum market liquidity operation

Jun 30 11:10 Italy Holds bond auction

 

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