USD/CAD HEADING FOR 1.1700 IN MEDIUM-TERM
16/07/2017
The Bank of Canada interest rate hiking from 0.50 % to 0.75 % pressured the USD/CAD to break her lower medium-term band at 1.3000. The assessed and measured USD/CAD’s long-term exchange rate target zone confirms the USD/CAD turned to downward direction. The alignment also confims the USD/CAD’s medium-term exchange rate target zone to downward, and both the long and the medium terms are confirming for USD/CAD to move to downward direction in medium to long terms.
The previous medium-term exchange rate target zone managed by the BoC and the FED about 20 % (1.4550/1.2550) for 2000 PIPs and much wider the global monetarists’ consensus for 15 % to maintain the economic and financial stability. At such, the Bank of Canada was failed to manage the internationally committed exchange rate target zone by allowing the USD to be over-appreciated in the market. After pushed up to central band/central parity, the USD/CAD aligned at 1.3700 and turned back to downward.
Based on the current new medium-term exchange rate target zone, the USD/CAD will visit the level of 1.1700 in medium-term as the new lower medium-term exchange rate target zone. Accordingly, short/sell the current medium-term exchange rate target zone (1.3700/1.1700) is recommendable, but late to short. Short/sell from the upper to the lower bands of daily, weekly, monthly or short-term will be updated in this analysis. Long/buy on USD/CAD not recommendable at this period of downward medium-term exchange rate target zone directional movement.
The Bank of Canada interest rate hiking from 0.50 % to 0.75 % pressured the USD/CAD to break her lower medium-term band at 1.3000. The assessed and measured USD/CAD’s long-term exchange rate target zone confirms the USD/CAD turned to downward direction. The alignment also confims the USD/CAD’s medium-term exchange rate target zone to downward, and both the long and the medium terms are confirming for USD/CAD to move to downward direction in medium to long terms.
The previous medium-term exchange rate target zone managed by the BoC and the FED about 20 % (1.4550/1.2550) for 2000 PIPs and much wider the global monetarists’ consensus for 15 % to maintain the economic and financial stability. At such, the Bank of Canada was failed to manage the internationally committed exchange rate target zone by allowing the USD to be over-appreciated in the market. After pushed up to central band/central parity, the USD/CAD aligned at 1.3700 and turned back to downward.
Based on the current new medium-term exchange rate target zone, the USD/CAD will visit the level of 1.1700 in medium-term as the new lower medium-term exchange rate target zone. Accordingly, short/sell the current medium-term exchange rate target zone (1.3700/1.1700) is recommendable, but late to short. Short/sell from the upper to the lower bands of daily, weekly, monthly or short-term will be updated in this analysis. Long/buy on USD/CAD not recommendable at this period of downward medium-term exchange rate target zone directional movement.
Canadian daily and weekly bands performance is mixed. Looking for USD/CAD and EUR/CAD at upper band and CAD/JPY and CAD/CHF at lower band to re-enter the market to long CAD/JPY and CAD/CHF and to short/sell USD/CAD and EUR/CAD in line to medium-term exchange rate target zone directionalmovement. Likely by tomorrow.