The summer was a constant back-and-forth struggle in sentiment between the two currencies. Now that we are nearing the tail end of Q3, things have changed from a monetary standpoint. The Fed keeps flashing signals of potential tapering this year and making investors consider a sooner-than-expected rate hike.
Both countries have great GDP q/q's meaning that they are rebounding at a very fast rate compared to other countries. The thing to consider between these two powerhouses is whether investors expect a raise in rates. Canada's overnight stayed the same at 0.25% although this week's beat in jobs numbers could suggest that the Bank of Canada might be looking to hike sooner. Right now, it's tough to say, but the USD looks like the best contender for higher rates to come quicker now that analysts believe the first hike to come in 2022. Looking short term, CAD seems to have the upper hand, but in the next 6-12 months time, USD might have an advantage as the economy is handling the pandemic better than Canada with a 5.2% unemployment rate vs Canada's 7.1%.
USDCAD looks like it formed a head and shoulders pattern on the 1D chart which could be the start of a downtrend from a technical standpoint. The 50 and 200 DMAs lie below as well as a support level around 1.24841. However, if price can break out of its consolidation zone (above 1.26697ish range) we could get a higher move to the first shoulder around 1.28029.
9/24/2021 The People's Bank of China banned all crypto transactions on overseas Chinese services along with its domestic ban. Bitcoin is down over 8% today and Ethereum is down 11.48%. Our outlook I think we're seeing a lot of noise around China and their condemning of cryptocurrencies before they digitize their own. In the short […]
Let's look into the Bank of England's Monetary Policy Summary which took place on Thursday the 23rd of September, 2021. Quick Summary: BoE keeps interest rates unchanged at 0.10% BoE will maintain its asset purchasing target at £875B The vote to keep policy unchanged passed with a 7-2 vote The minutes of the MPC meeting […]
9/23/2021 The precious metal snapped three days of gains and tumbled back down to the support range from $1740s-1760s approximately. Gold is down -.56% on the day going into the opening of the NY session. Our outlook Gold will likely rise on the US indices falling, and is usually due to slowing economic growth. Because […]
9/21/2021 Bitcoin Update For the past month, Bitcoin went on a tear rising over 20% from the beginning of August. Recently, however, China and other risk-off factors have contributed to a 23% decline from the recent highs around $52,760. Now the most prominent crypto has touched these monthly lows which could be a potentially good […]