Daily Analysis: Canadian Dollar Explodes on Rate Hike as Traders Await the ECB | Hacked: Hacking Finance
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Daily Analysis: Canadian Dollar Explodes on Rate Hike as Traders Await the ECB

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Daily Analysis: Canadian Dollar Explodes on Rate Hike as Traders Await the ECB

Introduction

This article was posted on Wednesday, 20:06, UTC.

Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2465 0.24%
DAX 12214 0.75%
WTI Crude Oil 49.12 1.05%
GOLD 1333.00 -0.55%
Bitcoin 4614 6.80%
EUR/USD 1.1915 0.02%

With tomorrow’s looming European Central Bank meeting, traders might have expected a less busy session today, and for the most part that proved correct. Forex markets experienced turmoil as another central bank, the BOC, stirred the pot when it unexpectedly hiked its benchmark rate by 0.25%. While only a handful of analyst predicted the move, the Loonie has already been among the strongest major currencies in recent months, as the Canadian economy remained very strong compared to its peers. The USD/CAD pair fell as low as 1.2130 after the decision, the lowest level since mid-2015.

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USD/CAD, Daily Chart Analysis

Stock markets recovered well off the North Korea-Hurricane lows as President Trump hit a less aggressive tone regarding the situation, while also reaching a short-term deal on the matter of the debt ceiling with the Democrats (but opposed by the Republican leadership). Safe haven assets tumbled on the de-escalation, while global equities drifted higher throughout the day. Gold is back near the $1330 level, and given the recent lofty gains in the commodity, more correction is likely. Oil is still headed higher in the meantime, getting closer to the $50 per barrel once again.

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NASDAQ, 4-Hour Chart Analysis

Cryptocurrencies

Most of the segment is well above the Monday mini-crash lows, with only NEO struggling to hold its ground after its huge losses. Bitcoin led the charge higher, together with Litecoin, as the other majors are still well off their previous highs despite the rebound, and the improved sentiment. While the long-term picture remains overbought in the case of the majority of the largest coins, more top-building could be in the cards after the broad and very strong rally. The next couple of sessions will be crucial for the sector, as the oversold short-term condition is now cleared and bulls will battle with bears for control near the current key price levels.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The German DAX index has confirmed the bear trap that we have been monitoring last week, and it has now broken out of the dominant downtrend as well, despite the still strong Euro that pushed European equities lower in recent months. The benchmark is testing the 12,250 level currently, and we still expect a rally to at least 12,375, with a more likely target of 12,500. The ECB decision could change things, but the current setup is encouraging for bulls.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA GDP 0.8% 0.8% 0.3%
14:30 CANADA Trade Balance -3.0 bill -3.8 bill -3.6 bill
14:30 US Trade Balance -43.7 bill -44.6 bill -43.6 bill
16:00 CANADA Rate Decision 1.00% 0.75% 0.75%
16:00 CANADA Monetary Statement

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA Retail Sales 0.2% 0.3%
3:30 AUSTRALIA Trade Balance 0.95 bill 0.86 bill
9:30 UK Halifax HPI 0.2% 0.4%
13:45 EUROZONE ECB Rate Decision 0.00% 0.00%
14:30 CANADA Building Permits 2.2% 2.5%
14:30 EUROZONE ECB Press Conference
14:30 US Unemployment Claims 245,000 236,000
16:00 US Crude Oil Inventories -5.4 mill

Featured image from Shutterstock

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Mate Cser

Mate Cser

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

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