USD/CAD – hike or disappointment?
We have a busy day as the Bank of Canada will publish the Overnight Rate, as you already know, the economists have forecasted an increase from 0.50% to 0.75%. A rate hike will help the Loonie to stay higher and to try to increase versus its rivals.
We’ll see what will happen because the rate hike could be priced in and the USD/CAD could ignore this big event. Price is trading in the green and is fighting hard to 1.2943 yesterday’s high, has climbed above a broken support, but unfortunately is still under massive selling pressure.
Maybe will be better to stay away this pair later because we may have a huge volatility and you could suffer a heavy loss. I want to say that a disappointment coming from the BOC will send the USD/CAD much higher on the short term.
Is struggling to increase after the massive sell-off, has found support right above the median line (ML) of the major descending pitchfork, signalling that is too oversold to drop further. Actually we have a false breakdown below the confluence area formed by the median line (ml) of the minor descending pitchfork with the second warning line (wl2) of the former minor ascending pitchfork.
Technically, we should have another leg higher on the short term after the failure to reach the ML and after the false breakdown, but we’ll see how will react after the BOC. The next upside target will be at the 23.6% retracement level, 1.3047 static resistance and at the upper median line (uml) of the minor descending pitchfork.
USD/JPY rejected by resistance area
Looks like that the minor upside momentum is completed and now we could have a minor decrease on the short term. Has decreased today also because the Nikkei stock index has slipped lower today to test and retest the 20058 static support (resistance turned into support).
The USD/JPY continues to move sideways after the failure to stabilize above the 114.00 psychological level, also dropped below the 113.50 level. Will increase further only if the JP225 index will have enough energy to stay above the 20058 and to climb towards the 20320 previous high.
USD/JPY founded strong resistance right above the short term 23.6% retracement level and now plunged much below the long term 23.6% retracement level. Is approaching the upside line of the former symmetrical triangle, where he could find support again, could only retest the chart pattern before will increase again. A larger increase will be confirmed only after a valid breakout above the WL3.
By Olimpiu Tuns, MultiBank Exchange Group