USDCAD Approaches Yearly Low as Fed’s Jerome Powell testimony opens way for a Rate Cut

Nikolas Papas

Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).

yearly low

USDCAD Approaches Yearly Low

July 11, 2019

Asian indices finished higher today as Fed’s Jerome Powell testimony opens the way for an interest rate cut in the next policy meeting. The Nikkei225 finished 0.51 percent higher at 21,643 the Hang Seng finished 0.81 percent higher at 28,431. The Shanghai Composite finished 0.08 percent higher to 2,917, while in Singapore, the FTSE Straits Times index finished 0.3 percent higher to 3,350. Australian equities ended 0.4 percent higher at 6,716 as the number of new home-loan approvals fell by a 0.1% in May, less than the 1% fall that economists’ forecast. The value of total mortgage lending, excluding refinancing, fell by 2.4% in May to $16.5 billion.

European equities also trading higher today mirroring the US and Asian indices, DAX30 is adding 0.02 percent to 12,375 CAC40 is 0.14 percent higher at 5,576 while the FTSE MIB in Milan is trading 0.66 percent higher at 22,190. The London Stock Exchange is 0,10 percent higher to 7,531 amid non-deal Brexit worries.

In commodities markets, crude oil trades 0.60 percent higher at $60.78 as traders turn cautious on geopolitical tensions. Brent oil trades rallies 4.4% at $67,01 per barrel despite major oil producers have agreed to cut output. Gold consolidates to yesterday’s high at 1,423 keeping the bullish momentum as the price holds above all the major daily moving averages. On the upside, strong resistance will be met at 1,427 the daily high and then at 1,437 recent high.      

In cryptocurrencies market, bitcoin (BTCUSD) retreats to 11,450, hitting the daily low at 11,120 and the daily high at 12,185. Immediate support for BTC stands now at $11,120 today’s low while next support stands at 11,000. On the upside, strong resistance now stands at 13,138 the high from yesterday and then at 13,500 round figure. Ethereum (ETHUSD) trades lower at 268 giving up over 30 dollars with capitalization now to 28.9 billion. On the upside, the immediate resistance stands at 317 yesterday high while the support stands at 243 the 50-day moving average, Litecoin (LTCUSD) also trades lower at 100. The crypto market cap now stands above $313.0 billion.

On the Lookout: 

Germany Consumer Price Index (YoY) came in at 1.6% in line with expectations for June. Germany Harmonized Index of Consumer Prices (MoM) came in at 0.3% above expectations of 0.1% in June. Germany Consumer Price Index (MoM) in line with forecasts at 0.3% in June. Germany Harmonized Index of Consumer Prices (YoY) in line with forecasts at 1.3% in June.

In the US trading session, we have the day 2 of Fed Chair Powell’s testimony closely at 14:00GMT. Fed officials Bostic, Williams, Barkin, and Kashkari will be speaking and can affect the EURUSD price. The US Consumer Price Index is due at 12:30GMT along with the US jobless claims and Canadian New Housing Price Index.

Trading Perspective: In forex markets, USD trades 0.20 percent lower at 96.89 ahead of the second day of Fed’s Jerome Powell testimony. The Aussie dollar trades higher at 0.6978, while Kiwi also trades higher at 0.6671.

yearly low
GBPUSD Daily Chart

GBPUSD trades higher for the second day at 1.2551 after yesterday the UK Gross Domestic Product, Month over Month, came in at 0.3% in line with forecasts for May. Major support now stands at 1.24 which if broken might accelerate the slide further towards 1.23 round figure. On the upside immediate resistance now stands at 1.2709 the 50-day moving average while more offers will emerge at 1.2896 the 200-day moving average.  

Sterling futures markets open interest increased by 1.000 contracts while volume also increased by 11,800 contracts.

EURUSD holds yesterday gains at 1.1273 and eyes the 1.13 mark which if the pair manages to close above will open the way to 1.1325 the 200-day moving average.  On the downside, immediate support for the pair stands at 1.1256 the 100-day moving average while extra support will be met at 1.12 round figure. 

Euro futures markets open interest increased by 4,600 contracts while volume increased by 91,500 contracts.

USDJPY is trading 0.27 percent lower at 108.14 having hit the daily low at 107.85 and the daily high at 108.43. USDJPY pair will find support around 108 round figure and then at 107.50. On the upside, immediate resistance for the pair now stands at 108.98 the daily high and then at 109.07 the 50-day moving average. 

USDCAD retreats down to yearly low at 1.3047 amid broadly USD weakness, and the rally in crude oil prices, Canada’s main export item seems to have added further strength in the Canadian Dollar (CAD). The pair will find immediate support at 1.3037 the low from February 1st while extra support stands at 1.30 round figure. On the upside immediate resistance now stands at the 1.32 zone before an attempt to 1.3450 recent high from 31st May.

yearly low
USDCAD Daily Chart

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