July 23 – Economic Events Outlook – Weaker Dollar in Play
The trading is all about technical analysis today as the economic calendar is only carrying the U.S. existing home sales and BOE...
Today, the global financial markets are likely to exhibit thin trading volume and volatility in the absence of top-tier economic data. Therefore, most of the investors seem to price in U.S. President Donald Trump’s discomfort with the Federal Reserve’s policy decision.
The Greenback extended losses over the news that Trump was worried about the Federal Reserve hiking interest rates two more times this year. Trump remarked that the Fed’s policy tightening and the strong dollar could harm the U.S. economy. Consequently, the dollar continues to trade bearish, keeping the bullion market supported.
Fellas, today’s trading is all about technical analysis as the economic calendar is only carrying the U.S. existing home sales and BOE (Bank of England) MPC member Broadbent speech. Let’s take a look…
Watchlist – Key Economic Events Today
USD – Existing Home Sales – 14:00 (GMT)
The National Association of Realtors will be releasing the existing home sales data. It’s an annualized number of residential buildings that were sold during the previous month, excluding new construction. It’s forecast to be 5.46M vs. 5.43M previously. The positive forecast can place a bullish pressure on the U.S. dollar today.
GBP – MPC Member Broadbent Speaks – 17:00 (GMT)
Broadbent is expected to speak about the history and future of quantitative easing at the Society of Professional Economists in London. Being an MPC (Monetary Policy Committee) his remarks carry importance, however, this event isn’t purely about monetary policy, so we can expect a muted response from the market.
USD/CAD – Ascending Triangle to Play
The USD/CAD pair dipped more than 150 pips on Friday after the President criticized the Fed’s policy of raising interest rates. Trump doesn’t really like the stronger dollar as it makes imports cheaper and exports expensive. Consequently, the trade balance results in the trade deficit.
For the moment, the USD/CAD is holding right above a strong trendline support level of $1.3130. On the daily chart, the pair just had a bearish crossover on the 50- periods EMA, signalling a bearish sentiment of traders.
USD/CAD – Daily Chart
I hope you remember the ascending triangle pattern that we spotted during the previous week. The pattern provided a solid resistance at $1.3350 and it’s supporting the Loonie near $1.3130 today. The violation of this pattern on the lower side can lead the commodity currency towards $1.3025 while a pullback can drive bulls until $1.3250.
USD/CAD – Key Trading Levels
Support Resistance
1.3116 1.3136
1.3111 1.3141
1.3101 1.3151
Key Trading Level: 1.3126
USD/CAD – Trading Plan
Investors are advised to keep an eye on $1.3125, below this the USD/CAD is likely to stay bearish. Whereas, the pair can stay bullish above $1.3125 until $1.3250. Good luck!
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