GBPCAD TO SELL (BOC Statement After Affects)New came out this morning for CAD on BOC statement, which we are looking to sell on the downside of the market.
Look to scalp TP: 1.693-1.69
BOC
$USD/CAD Possible SHORT but is there still more to go?The UDS/CAD has the Canadian Dollar getting stronger, Oil is slowly going where it needs to and the COVID is weak in the Country
With the BoC making a statement on Wed it looks like negative interest could be on the books!
So which way LOON??
ridethepig | OPEC, CAD and Everything In-Between...The OPEC theatre was an event for the masses, attended by unimaginable liquidity. Packed into enormous press conferences and expensive photoshoots so that the masses would be amused by the raucous discourse or moved by the collaboration. The plot seemed to contain the essence of desperation from Trump, in its concentrated and dramatic form all in attempt of saving US producers rather than saving lives... (sadly) Global Equities turning down is a faster way to get things through congress these days.
Consider the following swing, which arose after the Aramco attacks last year:
As the main battleground for which China, Russia and Saudis chose to swing in an attempt to play US shale. Remember it essentially boils down to the Gold:Oil ratio being a gauge of the health in petrodollar. A simple cheatsheet... lower gold:oil ratio = a healthy petrodollar structure. On the other side, if ratio rises it shows that the petrodollar market is under pressure (which has been the case for the last few years).
It has found a floor at +/- 15 and now moves up towards 86 !!!! ... This is sending loud loud alarm signals that something is rotten from within. Once Saudis began selling Oil in CNY this exploded, it's a buyers market and the seller (Saudis) will always do what it takes to keep the buyers (China) happy...Sure all sounds interesting @ridethepig, So what does this mean for CNY, USD and CAD?
I highly recommend digging deeper into how PBOC and CNY has responded since " The Great Lockdown "
In warfare, PBOC are playing the leading role with gusto! They are skilled horsemen and took pride in setting a hard floors across Chinese Equities, always positioning in value areas which we traded together here live 4 or 5 times since the crash. This bravery (if you can call it that) has flooded their FX reserves and combined with the composition restructuring we spoke about earlier in their biggest expense (Energy) towards the lows it effectively adds stability to their current account...meaning after all the dust settles from Covid-19, it's game, set and match for China:
After understanding the 'why' and 'how' behind the devaluation of Oil, you will notice how the OPEC meetings (or chariot races as I now like to call them) have become more and more extravagant. The renewed organising of longs in USDCAD dips is coming from a weak medium term outlook for CAD and the increased probability of USD taking charge once more of the haven flows, should we see another sell-off in stocks.
It has been a difficult chapter but one that has seen a lot of light thrown on the subject thanks to the dissections we've performed live here together. As can be seen in the long-term Oil chart, a test of $15 eventually looks organic although we are entering in the final stages of the drama so I prefer to play this in USDCAD.
You will find further considerations of the swings in the related ideas. As usual thanks for keeping the likes, comments and charts coming. Jump in with your views below!
CADJPY Probabilities of further stimulus incoming_BOCGoverning Council stands ready to adjust policy further and to deploy other market tools if required: BOC . 25 bps cut probabilities at the April meeting or sooner.
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Ahead BoCYesterday we saw an extraordinary cut in the interest rate with 50 bp by the FED.
Today is BoC's turn - they are likely to repeat the 50 bp reduction or they go even further by cut the interest rate with 75 bp.
This will cause the USDCAD to rise to 1.3475 and break to 1.3520.
ridethepig | CADNOK Market Commentary 2020.03.02Eyes on the technical breakdown in CADNOK to kickstart the week, a few important updates to make here as intervention begins globally from Central Banks and OPEC.
For those tracking Oil you will know we got the massive meltdown that we have been expecting in the chart-pack since last year:
I am tracking a much larger than expected cut from OPEC at 1mbpd and would therefore recommend trading a bounce in risk markets. The view of a cut from BoC this week seems a done-deal too - this will start the round of global easing.
On the technical side, targeting a fresh breakdown into the stops at 6.8xx. Invalidation is found above the recent highs. Thanks as usual for keeping the support coming with likes, comments and etc!
CADJPY Not an overall reversal but prolly retracement?BOC coming near and most of the currencies having this comdoll as a base or counter losing against the other side currency example FOREXCOM:USDCAD , it all give us some hint that market participant was dumbing loonie before its meeting. It may have retracement upward but overall deciding for now the overall market reversal might have fewer chances before the BOC meeting which market participants aren't feeling good about seeing the market sentiment on this cross pair we can say. We can have an eye on this pair this new week and examine how price action behaves. Technically those red and green lines on the chart are areas of interest which serve as support and resistance and those level hold some weigh as the price will respect them. Talking with weekly pivot point man! price was too savage last Friday which breached through weekly s3 of the pivot. Price taking breath for now @ 80.68 and it seems more then half % has already been priced in before the BOC meeting by market players at this point which let me think at least once that 80.68 level might hold price for a while and short retracement upward around 30.20% Fibonacci retracement level or even 50% might be a scenario depending on how market players sentiment changes between the time horizon of current to actual meeting release of BOC. Are you a range-bound market environment lover? Honestly, did you care about the light blue rectangle box yet? hehe.. :) If price repeats or respect this market environment man it will add some sugar on this retracement plan! Break lower with strong bearish momentum from 80.68 or 80.079 should signal us weak comdoll and further continuation lower of price ignoring the retracement probabilities.
ridethepig | Canada CPI Event RiskWith US away from their desks today we will get a dull session and the relentless loonie bid will grind us back towards the 1.3275x area. It is a good value level to re-engage with shorts and here looking to add ahead shorts there ahead of local CPI on Wednesday. The MT and LT outlooks for Canada are very good in my books;
A bullish USD view on risk via coronavirus flows will be better expressed versus EUR or even AUD because of relationship with China if things get really bad. Canada is less exposed on the monetary side (other than as collateral via oil) and as long as data holds up there will be no further rate cuts, and remember we have OPEC cuts coming next month.
As usual thanks for keeping the support coming with likes, comments and etc! Jump in with your charts and views below...
ridethepig | CAD Spot Commentary 2020.02.12An interesting addition to the Oil dynamics with OPEC cuts coming in March clashing with risk-off flows via coronavirus spillovers and everything else in-between. There is a lot going on; highly recommend tracking the retrace leg in Oil for this one it is really going to act as the main driver for us to lean on over the coming sessions. We can track accurately the isolation of USD and Oil with USDCAD. In diagram below, this one is coming from CADNOK, you will notice NOK outperforming:
You will notice CAD also finding demand into the 1.33xx handle as widely anticipated, happy to sit short USDCAD for now and continue working the sell side. Losing 1.324x in USDCAD will unlock the floodgates for a quick spike towards 1.305x.
Those with a background in waves will know that the impulsive extension is still marginally open but it would take a game changer on the oil front to get us down there in my books which is looking less and less likely given the shift away from Oil. The USDCAD downside can be played for 1H20 before things get difficult again in Oil.
Don't forget to keep the likes, charts and comments coming!
ridethepig | Apple in the worm for CADNOKA very good time to update the short-term flow setup for CADNOK after such a brilliant squeeze. For those tracking the 2020 Macro flows:
This week we have a simple technical move in play. A textbook case of "Apple in the worm" as it seems to me a poor choice of the moment for buyers to continue the advance. Extending the characteristics position (= swing configuration) by letting buyers go overboard and bet on momentum while the macro defence can be a reliable guardian.
A better move is to sell the 6.99xx highs here with targets located initially at the support levels 6.865xx.. and then perhaps 6.47xx. The business of a bullish NOK did not become an attacking instrument; stops can be kept comfortably above the 7.00xx handle.
Good luck all those trading CADNOK in the coming sessions, as usual thanks for keeping your support coming with likes, comments and etc!
BoC Cuts & RBA Hold - AUDCAD Double Whammy!Highlights overnight going to AUD with overshoots in the U-rate as expected. This number is going to trigger the RBA surprise hold that we have been tracking in this diagram:
Large hands spotted on the AUD bid last ear and will continue to do so as a lot more unwinding of positions needs to take place from those betting on FURTHER rate cuts. Tracking 0.692x in AUDUSD as a sensible target from the initial knee-jerk reaction.
The strategy for the flows from the AUD side in the chart have been dissected here in this diagram:
On the CAD side , Poloz caught me by surprise with a very dovish BoC. This was particularly surprising considering his pokerface at the fireside chat only two weeks ago! Focus now shifts onto whether this will be a “one off” cut…in my books the move in USDCAD should be contained by the 1.32 handle - the data (although below par) is not weak enough to justify a full blown cutting cycle. On the positioning side , long and medium term flows are still betting heavily long CAD so expect 1.32xx to provide a good opportunity to re-engage with a swing back towards 1.28xx later in the year as those longs from the recent rally begin to unwind.
Good luck all those in AUDCAD and holding for the long-term, this is going to the highs like a knife through butter. As usual, thanks for all the support with likes, comments, charts and etc !!
ridethepig | CAD Market Commentary 2020.01.09Interesting price action in USDCAD after another round of soft data from Canada. Poloz has a lot of work to do tonight if BoC are to move as rate markets are materially underpriced, especially on the front end. Expecting a dovish ‘fireside’ with early signs of encouraging demand above 1.30 this morning. Starting to cover shorts after the break through 1.304x has opened a move towards 1.31 and 1.317x, the original entries in the 2020 macro map:
USDCAD LMT BUY 1.304x => TP1 1.310x => TP2 1.317x | STP 1.299x
The reflation theme which is a bi-product of the dollar devaluation allowed CAD to outperform in the immediate term however now USD is in full control as CAD macro prints have started to turn down. As long as USD remains in first gear we will have room to test the topside again, as there are two sides to the currency pairs, rather than CAD strength in this move we are trading USD weakness.
As usual jump into the comments with your charts and questions to open the discussion, best of luck all those trading live and thanks for keeping the support coming with likes!!!
USDCAD: Good short entry here$USDCAD favors bearish positioning here, with stops @ 1.31797 at least. Downside to 1.29983 is 60% probable while below this stop level.
It's moving down from the most recent NFP support level that broke down a few days ago. Oil is also making higher highs at the same time, so I think this is a high probability trade, with a very well formed technical setup in this chart. Daily mode is a 10 bar level, which implies the time duration of the decline signaled today will extend for 10 trading days starting today.
Cheers,
Ivan Labrie.
ridethepig | CADNOK 2020 Macro Map A good time to map the strategy and flows for CADNOK as we approach year-end. As you will have noticed I am tracking for a major pullback in the cross over the first half in 2020, this is coming from large macro forces at play. Central bank coordination has opened up the opportunity for NOK to outperform CAD.
Firstly the reflation theme via USD devaluation is going to help Canada a lot less than the rest as Canada will receive a spillover from the US manufacturing recession.
Secondly we need to discuss the impact of Oil across both economies. CAD and NOK are affected by oil with divergencies in their breakevens. For example Canada breakevens are circa $45 compared with Norway at $23 per barrel. Meaning simply Norway has more breathing room for the fall in Oil:
The third and final leg to the stool is coming from yield differentials. After the more dovish than expected shift in stance from BoC, the window is open for a cut which has not been fully priced while Norges which was previously the last hawk standing has hit the pause button. I personally see room for another hike from Norges next year which is the leg I am looking to trade here.
Best of luck all those in CADNOK, a very good pair to add to your FX portfolio.
Early play for Euro weakness Euro is not the strongest right now, and with what seems to be a currently risk favourable environment CADEUR long is a favourable addition to my portfolio.
This is a pre-emptive entry before the break will still have the potential to generate alpha via the swap rate.
USD/CAD Waiting BoCBoC rate decision is the main focus today. For the past 2 weeks, USD/CAD has been traded in a tight range and while no changes are expected from the central bank, Governor Poloz's speech will be watched closely.
He could continue to talk about the possibility of an “insurance cut” in coming months, as uncertainty of trade war persists. If Poloz focuses on the downside risks for the economy, USD/CAD could break upward easily but if he emphasizes the appropriateness of current policy, USD/CAD should fall deeply.
Also note that in the middle of Nov. the H4 50-day SMA crosses above the 200 SMA. This crossover, known as a ‘golden cross’, is a bullish sign for the pair. On the upside, 1.3327 (high of the current range) is the next resistance line. A clear break above 1.3327 will resume the rise from 1.3042 to 1.3346/82 (October and September's highs) resistance zone. Firm break there will suggest completion of medium-term consolidation from 1.3664.
On the downside, a break of 1.3190 will indicate completion of the rebound and turn bias back to the downside for retesting 1.3042 support.
GBPCAD updateTesting the down trend line again. 1.74 level resistance.
Bank of Canada today, rates expected unchanged, so it is all about the rhetoric of the statement.
Short offers best risk-reward. Break of the resistance for a long.
GBP spiked this morning on expectation of conservatives wining in a poll published in the 'Sun' newspaper.
Good Luck!
Watch Out: BoC Meeting Could Trigger Massive H&S PatternA promising setup is forming in CAD/CHF on the 4-hour/daily chart. The pair is forming a H&S pattern, but the price has faced some buying pressure at the neckline this morning.
A break below 0.7420 would signal a selling opportunity, with a profit target of around 200 pips (or at least at the August lows around 0.7270).
The Bank of Canada meets tomorrow for the rate decision. This will likely be a catalyst for the pair - holding rates steady would push the price up (neckline acting as support), while an unexpected rate cut would trigger a selloff in CAD.
ridethepig | USDCAD 2020 Macro MapThis chart is for those mapping USDCAD over the coming Quarters; a clean and simple strategy targeting the lows of 1.27xx by mid 2020 before finding somewhat of a bounce back towards the 1.30xx handle by year-end.
Main theme behind the flows is coming from dollar devaluation, I would recommend all to follow the Macro Dollar charts I have posted:
The reflation theme which is a bi-product of the dollar devaluation will allow CAD to outperform in the immediate term. There are two sides to the currency pairs, rather than CAD strength in this move we are trading USD weakness.
A wide range which is already starting to show signs of cracking the downside:
Best of luck all those trading USDCAD into year-end with dollar devaluation underway, this is going to be a monster swing with fireworks on both sides.
ORBEX:Loonie Bid on Poloz As Impeachment Hearing Goes Unnoticed!In today’s market insights video recording I talk about markets’ muted reaction to the impeachment hearings and focus on the assets that moved!
USDCAD was bid on a hawkish Poloz as he lowered down markets' expectations of a Dec rate cut. Loonie was also supported by OPEC+ likely production cut extension.
While at it, I also analyse EURUSD despite it ended the session somewhat muted as volatility increased. We are also minutes before German GDP and Lagarde’s speech!
Stavros Tousios
Head of Investment Research
Orbex
This analysis is provided as general market commentary and does not constitute investment advice.
