The daily oscillator bearish crossover (chart 2) giving a negative outlook in the near term, but the daily RSI indicating a range trading. Ahead of today’s CPI and Retail events risk outcome, we believe the price action likely to provide a direction for the next week’s event risk. Central banks (Fed and BOE) rate paths are largely priced in for 2017.
News: US Senate version of the budget resolution was passed- Wallstreet cn reported (12.45AEDT)
FX traders are closely watching to the next week’s BOC policy meeting (Oct 25, Wed). We remain neutral on CAD, US dollar strength is the key in the near and medium term.
Near-term potential support finds between 1.2450-1.2430 and additional support finds at 1.2410 rounded to 1.2400. Further retracement could expect only below 1.2400 on a daily closing basis.
Intraday resistance seems at 1.2540/1.2560, 1.2600 and 1.2660.
- The combination of a dollar weakness and better Canada macro data could retrace the cross initially to 1.2400/1.2370 and 1.2330.
- In case of weak macro data, we forecast a rebound to 1.2540/1.2560.
- A weekly close above 1.2660 could extend the rally further to 1.2770, chances are remote.
Weekly range: 1.2370-1.2600
Monthly range: 1.2300-1.2770
View: In case of a dip we remain a buyer between 1.2330/1.2300.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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