Hello Traders,
We expect movement today in the FX market and my main focus will be on the USDCAD. At the CAD court we have a BoC monetary policy rate announcement later in the NY session following two quick rate hikes in the previous sessions. It looks likely that BoC might put a brake on further rate hikes. Economic data show that unemployment rate is steady but retail sales and CPI remained subdued and it is practical to say that further hikes will put more pressure on an economy that is just recovering from a housing bubble. All in all, if Governor Poloz remains confident of the economy and mentioned a clear predetermined path for the Loonie, the USDCAD will dip. On the flip side, if Wilkins and Poloz want the BoC to proceed with caution, the USD will surge. Political events continue to mire the USD. News that the Tax Reforms bill might not pass by November 2017 because the GOP senators are short of numbers to warrant a simple majority might necessitate Trump to rally his senators to support the bill rather than insult them. These tax reforms and the intended corporate tax slash will help in the long term to buoy the already high stock market. On the other hand, news is GOP senators are favoring Taylor over Powell. Taylor is a known hawk and if that is the case, the USD should benefit.
In the monthly chart, there is an evening star three bar reversal and a buy signal turning from the oversold territory. Guided by this, we shall only enter long positions in the daily or weekly chart with fine tuned entries in the 4hr charts. If price fail to close and maintain its position above 1.27, then I will wait till a stochastic buy signal is printed in the 4HR chart.
I will trade as follows:
Buy Stop: 1.2730
Stop Loss: below 1.2630
Take Profit: Target 300 pips minimum

usdcad 4hr chart-25.10.2017

Source: Dalmas

usdcad monthly chart-25.10.2017

Source: Dalmas


  1. Hadyn S. says:

    Hi Dalmas!
    Thank you very much for this post. I just put up a post that was fishing for any opinions on the CAD. My response here is post release, so I’m pretty confident, that you were right, and my question about CAD bears sending the bulls back to the pin has also been answered. I didn’t catch this in time to utilize your excellent awareness on the pair this morning, but it has help me in my decision of switching to a CAD bear. Its been a long bull run. Time for a change. Again, thank you!

    1. Dalmas Ngetich - FOREX.TODAY says:

      Hi Hadyn, thanks mate. Of course if you caught this, you better hold for a long time. Three months at minimum while buying on dips on the daily chart. Nice bull set up in the monthly chart, which is rare. What do you think of Euro and ECB today?

      1. Hadyn S. says:

        They’ll leave the rates the same, and Draghi will speak in riddles to keep all the bulls as subdued as he can, while letting some very subdued tapering out of the bag. I believe most of the purchase dial backs have been priced in since the first discussions about diminishing German bund availability earlier in the year. But that won’t keep some high volume scalping from seesawing the EURUSD. There is a perfect bearish head and shoulder pattern, so until the right shoulder breaks one way or the other, I’ll stay on the sideline. I don’t think a tight stop will work today.

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