USD/CAD Daily Forecast – Choppy Ahead of July FOMC Minutes ReleaseThe major focus for the day would remain over the July Canadian CPI data release and FOMC minutes. Since the start of August, the USD/CAD had hardly made a move below the Ichimoku Clouds until today.
After breaching above the robust 1.3337 resistance handle last day, the pair had rebounded downside in the next move. Today, the USD/CAD pair opened near 1.3318 level and handed over the control to the bears. Nonetheless, the pair remained capped within 1.3312 level in the Asian trading session.
Key Economic Events
After a long time, the market will witness some significant CAD-specific events today. The major focus would remain over the July Consumer Price Index (CPI) data release. This time, the street analysts forecast the YoY CPI to drop 0.3% over 2.0% prior figures. On the contrary, the consensus estimates the MoM CPI to soar 0.4%, reporting 0.2% over -0.2% previous figures.
Later the day, on the US economic docket, traders would pay attention to the release of July FOMC minutes, scheduled at 18:00 GMT. The US Fed appears to lead all other major Central banks for a rate cut. The market keeps a dovish stance over the FOMC minutes after the 25 bps rate cut of last month. Nevertheless, Fed Chair Powell had showcased lower signals for further ease in the monetary policy. Such a confusion among the market participants would get clarified post-release of FOMC minutes today.
Release of US July MoM Existing Home Sales would remain another point of interest for the traders on Wednesday. The market hopes this Housing data to jump 120K this time over the last 5.27 million.
At around 14:30 GMT, EIA Crude Oil Stocks Change computed since August 16 will come out. The street expects this Crude data to record -1.885 million in place of the prior 1.580 million.
On the daily chart, the Loonie pair was displaying a choppy performance, backed by an overbought Stochastic technical indicator. Hence, accordingly, the market might witness a congestion breakdown in the near term.
Nevertheless, a 1-month-old slanting ascending support line remain stalled beneath the pair to prevent any potential downfalls. In case of upward price action in the near term, breaking above the sturdy 1.3345 resistance would call for another big challenge. Above all, the major supporting rationale for the bulls remains the below-lying Parabolic SAR which would trigger a congestion breakout soon.
Since the start of August, the USD/CAD had hardly made a move below the Ichimoku Clouds until today.
Despite that, the conversion stays above the pair, developing a short term bearish perspective. At the same time, the base line stood below the pair, supporting the bulls. Anyhow, from a broader point of view, though there won’t happen an immediate sharp plunge, a slowdown seems imminent.