Canadian Dollar Steady after CPI, Markets Consolidate


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Canadian Dollar Steady after CPI, Markets Consolidate

Canadian dollar remains bounded in tight range after release of June consumer inflation data. CPI accelerated back to 1.2% yoy but missed expectation of 1.3% yoy. Core CPI also accelerated back to 1.3% yoy, meeting consensus. Both figures were well below BoC's 2% target. Stephen Poloz had his first BoC rate announcement earlier this week and noted in the statement that current monetary stance should remain appropriate "as long as there is significant slack in the Canadian economy, the inflation outlook remains muted, and imbalances in the household sector continue to evolve constructively". With the current inflation outlook, it's believed that BoC is still far from kicking start the normalization of monetary policies. Technically, note that USD/CAD is still maintaining a higher high, higher low pattern since last August. And it's drawing support from 55 days EMA for the moment. There is no change in the bullish outlook yet and another high above 1.0608 is anticipated after completing recent consolidations.
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Featured Technical Report

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 99.69; (P) 100.17; (R1)100.89; More..
Intraday bias in USD/JPY remains on the upside and recovery from 98.18 should extend higher. Break of 101.53 will resume the whole rebound from 93.78. But still, such rebound is viewed as the second leg of the consolidation from 103.73. Thus, we'd be cautious on strong resistance below 103.73 to bring reversal. Meanwhile, below 98.89 will turn bias back to the downside for 98.18 and below.
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Economic Indicators Update
GMT
Ccy
Events
Actual
Consensus
Previous
Revised
04:30
JPY
All Industry Activity Index M/M May
1.10%
1.20%
0.40%
0.10%
06:00
EUR
German PPI M/M Jun
0.00%
-0.10%
-0.30%
06:00
EUR
German PPI Y/Y Jun
0.60%
0.60%
0.20%
08:30
GBP
Public Sector Net Borrowing (GBP) Jun
10.2B
9.3B
10.5B
12.8B
12:30
CAD
CPI M/M Jun
0.00%
0.10%
0.20%
12:30
CAD
CPI Y/Y Jun
1.20%
1.30%
0.70%
12:30
CAD
BoC CPI Core M/M Jun
-0.20%
-0.30%
0.20%
12:30
CAD
BoC CPI Core Y/Y Jun
1.30%
1.30%
1.10%
Orders and Options Watch

US Session: Orders and Options Watch

EUR: The single currency remained confined within narrow range after running into resistance at 1.3151, indicated sell orders from Asian CBs and funds are still noted at 1.3150 as well as 1.3170-80, mixture of offers and stops is located at 1.3200-10, more sell orders are tipped at 1.3225 and 1.3250-60. On the downside, bids at 1.3100-10 were filled but buy orders in good size are still seen at 1.3065-70, more buy orders are expected at 1.3050, followed by buying interest around 1.3020 and further out at 1.2990-00, mixture of bids and stops is located at 1.2950.
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Forex Trade Ideas

Trade Idea Update: GBP/USD - Target met and stand aside

Although intra-day anticipated resumption of recent upmove to 1.5283 (our long position entered at 1.5175 met target at 1.5280 with 105 points profit) has justified our bullishness and recent rise from1.4814 low may extend one more upmvoe, loss of near term upward momentum should prevent sharp move beyond previous resistance at 1.5305 and reckon 1.5340-50 would hold, risk from there is seen for a retreat later.
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Trade Idea: USD/CAD - Hold short entered at 1.0410

Despite rebounding from 1.0355 earlier this week, as the greenback has retreated after faltering below this week's high of 1.0445, retaining our bearishness for the decline from1.0609 top to resume after consolidation, below 1.0355 would bring another test of last week's low of 1.0326, break there would extend the decline from 1.0609 top for correction of recent upmove to 1.0290-00 but reckon previous minor resistance at 1.0239 would limit downside and price should hold above 1.0200
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Candlesticks Intraday Trade Ideas Update Schedule (GMT):
1st Update: 0630 - 0700; 2nd Update: 0930 - 1000; 3rd Update: 1230 - 1300; 4th Update: 1500 - 1530
Pairs Covered: EUR/USD, USD/JPY, GBP/USD, USD/CHF
Elliott Wave Daily Trade Ideas Update Schedule (GMT):
AUD/USD, EUR/JPY: 0800 - 0830; EUR/GBP, USD/CAD: 1430 - 1500
Suggested Readings
Fundamental Highlights
Technical Highlights