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USDCAD Testing Ichimoku – US Economy Overview


Aug.22.2016

USDCAD Testing Ichimoku

The US dollar got a bit of a boost on Monday with USDCAD testing Ichimoku. Is the new sentiment enough to breakthrough? Also what's up on the economic calendar on the final days of summer?

USDCAD Testing Ichimoku - Kiana Danial of Invest Diva presents Forex Economic Calendar USDCAD Testing Ichimoku - Kiana Danial of Invest Diva presents Forex Economic Calendar

 

USDCAD Testing Ichimoku | Technical Analysis

On lower oil prices, USDCAD testing Ichimoku however with low trading volumes during the final weeks of summer we could expect the pair to continue its consolidation between 1.27 and 1.33.

 

USDCAD testing Ichimoku USDCAD testing Ichimoku

The pivot level lays on the 23% Fibonacci retracement level at 1.30 with support at 1.25.

US Dollar Fundamentals

The Tale of Jackson Hole...

It is not as hot a topic as it once was, but the annual Jackson Hole Economic Symposium is baaaack! an annual forum for central bankers, finance ministers, academics, and financial market participants from all around the world. It has been sponsored by the Federal Reserve Bank of Kansas since 1978 and got its name because it has been held in a ski resort in Jackson Hole, Wyoming since 1981.

This year’s symposium is entitled “Designing Resilient Monetary Policy Frameworks for the Future.”

We can assume that participants would talk about the future of monetary policies based on the strengths and weaknesses the major central banks’ existing programs. The ECB Governor Mario Draghi has been talking about central banks “aligning” their monetary policies for months.

Other topics that might come up in the discussions include China’s economic slowdown, falling oil prices and its impact on global inflation, Brexit concerns, and Shinzo Abe’s stealing Rio Olympics closing ceremony by his Super Mario style appearance.

The highlight of the event won’t happen until Friday, when Janet Yellen is scheduled to deliver her keynote speech. Market players expect the Fed  to take the opportunity to share the Fed’s long-term outlook on the U.S. economy and provide clear hints on when the central bank would raise its interest rates.

Coming up...

On the economic calendar  the US will release their set of Markit manufacturing PMI on Tuesday at 1:45 PM GMT and their New Home Sales for July at 2PM.

On Wednesday we have the quarterly House Price Purchase Index out of the US at 1 PM GMT. US Existing Home Sales  for JULY is set to be out at 2 PM, their Crude Oil Inventories  for 2:30 PM, and their 5-Year Note Auction at 5 PM GMT.

What could really make Ms. USA shake it up?

The main catalysts for the USD however in the coming months remain the rate hike expectations and US elections.

 

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The most recent NFP numbers printed unmistakably strong employment figures for the month of July. More jobs and higher earnings and participation rate mean that Americans are working longer, clocking in longer hours, paid more, and are more encouraged to look for employment. Of course, that was before we saw the not-so-hawkish FOMC meeting minutes. I will be covering the US election and its potential impact on the markets this Thursday August 25th, so don’t forget to claim your free seat.

 

Trading Strategy

USDCAD testing Ichimoku currently. For a bullish scenario, wait for a confirmation of a break above the cloud. A break below pivot of 1.27 could turn our outlook to bearish with 1.25 as first alternative target.

More on Economic Calendar

Tuesday

Asian session: We had Japan’s Nikkei  manufacturing PMI first thing during the Asian session and Bank of Japan’s Kuroda Spoke at BOJ's Fintech Conference at 4 AM GMT.

London Session: Moving forward we have the Swiss Trade Balance for July at 6 AM GMT, and preliminary Markit PMI data for August out of countries in the EU including that of France at 7 AM, Germany at 7:30 AM, and EU at 8 AM GMT.

New York Session: Later during the New York session the US will release their set of Markit manufacturing PMI at 1:45 PM GMT. Euro-Zone Consumer Confidence is scheduled for 2 PM, same time the US will release their New Home Sales for July.

Next day's Sydney session: New Zealand Trade Balance is set to be out during the next day’s Sydney session at10:45 PM GMT to create volatility in the Kiwi crosses.

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Wednesday

Asian session: During the Sydney session Australia’s Construction Work Done Measures the value of all construction completed in Australia during the previous month. Japan will release their Leading economic  Index for June.

London Session: Moving forward we have a set of German economic data including their Gross Domestic Product out at 6 AM which could impact the EUR crosses. Next we have the BBA Loans for House Purchase for July out of the UK at 8:30 AM GMT.

New York Session: Later during the New York session we have the quarterly House Price Purchase Index out of the US at 1 PM GMT. US Existing Home Sales (JUL) is set to be out at 2 PM, their Crude Oil Inventories  for 2:30 PM, and their 5-Year Note Auction at 5 PM GMT.

 

Next Day's Asian session: Japan Foreign bonds and Stocks investment data for August 19th will be out at 11:50 PM GMT to end the trading day.

 

Here are Invest Diva's calculations for important USD/CAD  approximate levels to keep an eye on:

Support Levels Turning Point Resistance Levels
1.27 1.30 1.33
1.25 1.27 1.3560

 

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 xoxo

Kiana 喜愛成
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