USDCAD, H1 and Daily
The dollar saw little impact from the tax bill votes, which passed in both the House of Reps and the Senate. The House will re-vote later today due to procedural irregularities in the vote yesterday, and is expected to pass. The successful passage of the bill has been widely anticipated, which will mark the first legislative win for the GOP under the Trump administration and is generally seen as a positive for the dollar. USDJPY rallied to one-week high above 113.00, EURUSD tipped lower while AUDUSD and USDCAD have been seeing little direction.
USDCAD has settled back in the mid 1.28s after a short-lived spike above 1.2900 level yesterday. The pair has failed to hold gains above 1.2900 on multiple occasions since early October. The pair is in a consolidation range , between 1.2700-1.2900 since then. How the U.S. dollar benefits from the expected tax overhaul, how oil prices evolve, how NAFTA re-negotiations go, and how the BoC proceeds with its slow-go tightening cycle will be dominant themes for USDCAD heading into 2018.
Meanwhile,many Dollar crosses today, is likely to have another rally based on re-voting today. However, USDCAD yesterday had been slightly affected by Tax bill, since we have seen shifted just 14 pips on Tax Bill. Therefore, since pair failed to break the 1.2900 yesterday, it might manage to break it today on today’s re-voting but also on today’s Economic Data, such as Canadian Wholesales data, US Existing Home Sales and Crude Oil inventories. Therefore within the day is likely to see a breakout above the consolidation range. However if this fails once again, then in longterm the pair is anticipated to hold in the rough 1.2700 to 1.2900 consolidation range over the holiday period, with Momentum indicators being neutral,
In the short-term, however, and more precisely, in the hourly chart, the pair is in a downtrend since last night, retesting the support of the week, at 200-period MA, at 1.2846. Hence the intra-day picture of the pair could provide some short-term opportunities. The break within the day below the 1.2865, could suggest negative momentum down to 1.2812-1.2820 area. Oppositely, a hold above the 1.2845-1.2850 today and the sign of positive momentum such as a break of recent high fractal in the hourly chart, or a break of the 50-period MA, could suggest a retest of the PP level at 1.2882 and the round level at 1.2900.
Nevertheless, on Yesterday’s post, I mentioned two Entries taken on GBPCAD and EURGBP. These positions Break-even, with a +30pips Gain in GBPCAD, which reached T1 at 1.7240 and a -25pips loss in EURGBP, which stopped out at 0.8850.
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