USDCAD: Expecting a breakout and push up to 1.38
With public holiday's in both USA and Canada tomorrow, I expect a quiet start to the week for this pair.
On Tuesday it's Canada CPI which has been falling. Bank of Canada have just paused its rate rises as it expects inflation to come down to around 3% by mid-year and 2% in 2024, so if inflation continues to fall this should be negative for the CAD.
On the other-hand, the DXY strength I've posted about in recent ideas seems to be materialising and I'm expecting a push up to test 105.2 - 105.6, particularly with the FED stating 'the battle with inflation certainly isn't won', and recent other economic data supporting the chances of the US avoiding recession. The FED still has room for manoeuvre and may be looking at another 0.5pt hike in the pending FMOC minutes, which will be good for the dollar.
From a technical perspective, price is bouncing off the 200MA (8hr) and above the 50MA and 100MA, which are about to cross, and so I am bullish bias.
If the fundamentals play out as I expect, I'll be looking to get in long on this pair before the breakout of a quick for a quick scalp, and then monitoring for a rise up to 1.38 following the break and retest.
On Tuesday it's Canada CPI which has been falling. Bank of Canada have just paused its rate rises as it expects inflation to come down to around 3% by mid-year and 2% in 2024, so if inflation continues to fall this should be negative for the CAD.
On the other-hand, the DXY strength I've posted about in recent ideas seems to be materialising and I'm expecting a push up to test 105.2 - 105.6, particularly with the FED stating 'the battle with inflation certainly isn't won', and recent other economic data supporting the chances of the US avoiding recession. The FED still has room for manoeuvre and may be looking at another 0.5pt hike in the pending FMOC minutes, which will be good for the dollar.
From a technical perspective, price is bouncing off the 200MA (8hr) and above the 50MA and 100MA, which are about to cross, and so I am bullish bias.
If the fundamentals play out as I expect, I'll be looking to get in long on this pair before the breakout of a quick for a quick scalp, and then monitoring for a rise up to 1.38 following the break and retest.