In our Forex update, we’re going to conduct a USDCAD analysis using the IDDA approach. In the cryptocurrency update, we’re going to talk about Ethereum today, analyzing its price from a technical point of view and also review the most recent news on the second largest cryptocurrency by market cap.
USDCAD Analysis Ahead of BOC Rate Decision
The first point of the IDDA focuses on technical analysis. The USD/CAD pair continues above the daily Ichimoku cloud with pivot points set at 1.2540 and 1.2724. We could see a pullback during the potential volatility caused by the BOC rate statement ahead on Wednesday. The future cloud has turned incredibly thin, although it has a hint of bullish sentiment. The Chiko span has yet to cross above the daily cloud. However, the Kijun line has already crossed above the Tenkan line. Learn more about Ichimoku strategy development here.
USDCAD Analysis – Ichimoku Daily Timeframe
Fundamental Points: The second point of the IDDA focuses on fundamental analysis. The main market movers for USDCAD this week could be Bank of Canada’s rate decision on Wednesday, and the US GDP data on Friday.
Canada’s side: While more rate increases are on the horizon for Canada, possibly before the end of the year, the BOC is expected to hold rates at 1 percent on Wednesday. That’s because of the list of unknowns including tighter mortgage rules, uncertainty about North American Free Trade Agreement (NAFTA), and a moderating economy. These could force policymakers to wait and see.
Market participants will go through Wednesday’s policy statement to get a better understanding of outlook on the housing market and how risks around trade policy have increased after an end to recent NAFTA talks.
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US Side: While the U.S. continues to face a ton of geopolitical tensions, its Gross Domestic Product (GDP) is expected to tick lower to 2.6% in the third quarter, compared to the 3.1% reading in the previous quarter on an annual basis. A better than expected result could push the USD/CAD pair higher.
Sentimental USDCAD Analysis: The third point of the IDDA focuses on market sentiment. Retail trader data shows 56.2% of traders are net-long the USD/CAD pair. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDCAD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDCAD-bearish contrarian trading bias in a shorter time-frame.
Trading Strategy: As the 4th point of the IDDA, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio. Join us for a free MasterClass to learn more.
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Ethereum (ETH) Technical Analysis and Fundamental Updates
Ethereum price tested below the daily Ichimoku cloud as traded versus the USD on Monday. However, it seems to be supported by the pivot point of 266. The future cloud has turned bullish, although it remains fairly flat. We are currently in a wait-and-see mode for ETH/USD, eyeing a confirmation either above or below the Ichimoku Kinko Hyo cloud’s daily setup. The medium-term support is set at 224, while resistance is at the all-time-high level of 393.
ETHUSD Tests Below Daily Ichimoku Cloud
Now let’s see what’s been going on in the world of Ethereum since we last covered it. While there are no real market-moving announcements, there are some fun topics making headlines.
First off, Dubai hosted a government-backed graduation of Ethereum blockchain developers on Sunday. Out of 1,300 applicants across 96 countries, 10% of the applicants made the cut. On Sunday, ultimately 58 blockchain developers from around the world graduated from the 8-week online course, supported by Smart Dubai.
In other international news, Russia is reportedly hosting a different kind of ceremony, with consumers soon to face Bitcoin and Ethereum vodka. an entrepreneur from Russia has delivered three patent applications for Bitcoin, Ethereum, and Ethereum Classic to become the brand names of the country’s famous spirit.
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On the Economic Calendar …
On the economic calendar today we have Markit Germany Services PMI during the London session at 7:30 AM GMT, followed by ECB Bank Lending Survey at 8 AM. Markit US Manufacturing, Services, and Composite PMI data will be up next at 1:45 PM GMT which could also impose volatility to USD/CAD, along with other US dollar crosses.