USD/CAD Daily Signals – August 29, 2017

Greenback gaining against Canadian dollar

What’s in the News?

During the month of July, the U.S goods trade slippage increased as the exports fell. The export of consumer goods also declined further suggesting a moderate contribution to the economic growth in the third quarter. The capital goods exports also rose at 1.5 percent.

The annual Jackson Hole Conference held at the Federal Reserve Bank of Kansas City presented a direct perception about the monetary policy for this year and its following year. The reappointment of small odds of the Fed Chair Janet Yellen by the Trump administration perhaps would be the biggest takeaway as her term ends in the month of February.

During the speech, Yellen spoke about the financial regulation by explaining the response to the vulnerabilities caused by the financial crisis and developing Great Recession. She looks at this as a work in progress and the main aim of this is to refute Trump administration’s antiregulatory approach.

The main strategy of Yellen is that ‘a well- regulated financial system will yield higher growth over time by reducing the frequency of financial crisis.’ She is also open to revise the regulations once the impacts become clear. If according to the Yellen’s belief, the current regulatory framework leaves the financial system strong, then there would be a lesser need for rate hikes.

What do the Charts Say?

Intraday bias in USD/CAD trading above 1.2448 level gets a good support base that reinforces the expectations of changing the bullish bias in the upcoming period. This way is open to head towards the recently recorded top. On the near term basis, the price provides a new positive close above the level. This confirms its affection by the domination of the bullish bias in the near and medium period. We keep waiting to achieve the target at 1.2556. The price gets its positive momentum from stochastic stability above the 50.0 level. This confirms its attempt to reach the previously suggested target to face the level. The pair trading on rebound is found at latest trend line support. Hence, we’d be expecting resumption of larger up trend from current resistance-turned-support levels. However, we expect the price first to test the 50EMA, and a break here should see the pair retest the 100SMA.

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