Bank Of Canada Questioned On CPI Calculation
Srdan Sore
After cutting rates last week the USDCAD pair flirted with the 1.30 level for almost a week now and in the end managed to trip the stops above the figure. There is still room to go for the pair to the upside as it seems to be extremely well bid on any dip. That being said,... Read more
After cutting rates last week the USDCAD pair flirted with the 1.30 level for almost a week now and in the end managed to trip the stops above the figure. There is still room to go for the pair to the upside as it seems to be extremely well bid on any dip. That being said, Bank of Canada is facing criticism on the back of how they calculate and interpret inflation as the method used is quite unique in modern economics in the sense that it is not taking into account seasonal adjustments as well as not considering price changes for all categories.  Nevertheless, the Canadian Dollar has been sold aggressively all over the board but I would still say the USDCAD pair is still offering a nice selling opportunity for the trader with a medium/long term horizon. USDJPY Well Supported On Dips Despite major revisions to the downside for the Industrial Production in the United States that made US stocks moving lower, USDJPY is finding buyers on each end every dip as market participants still have a hard time figuring lower equities and Fed rate hike probability.  From a technical point of view the USDJPY is in a corrective wave as after the 125.80 area came with the NFP (Non-Farm Payrolls) in June and from that moment nothing but large swings with the 120 level almost being broken to the downside.  I am still saying that most likely the USDJPY is going to trade the 120 level before making new highs and this is the trading plan heading into FOMC (Federal Open Market Committee) next week. Commodities Crash Gold is plunging like a rock on Chinese selling news and the dip is so powerful that even the most bullish of the bulls should feel some pain.  I am a bit exposed there but so it was last month as well as from a technical point of view the pair is forming on the daily chart a running triangle and all we have to do is to wait for the b-d trend line to be broken before making a new decision to buy call options. Until then, watching the massacre and its implications for the Australian Dollar and Canadian Dollar is a lesson for every wannabe trader.  Not only gold is crashing but oil also is having a hard time standing on its feet as the Iranian nuclear deal effects are still weighing in on it. However, on the oil market I have some call options with end of month expiration date as it is still lagging the Canadian Dollar move. Reserve Bank Of Australia On Hold RBA (Reserve Bank Of Australia) is on hold with its monetary policy as the problem for Australia seems to come from China rather than from its own territory.  The thing is that the Chinese economy is heavily influencing the value of the Australian Dollar as more than one third of Australian exports are going to China.  Therefore, it is not surprising that the AUDUSD pair is sold every time it is trying to make a jump above the 0.7400 level as recent Chinese shocks sent some negative vibes on the pair as well.  From a technical point of view the AUDUSD pair is trying to carve a bottom after it ended a zigzag to the downside and now is forming an intervening X wave, or a connective X wave that should stretch all the way to the upper side of the resulting channel. This implies that the 0.80 level is going to be tested sooner rather than later and as a consequence I bought some AUDUSD call options with end of July expiration date.  Because we’re already in the second half of July, it means the expiration date is not that far away as it may appear. EURUSD Recovering After Greece reached a deal with its creditors it seems that all troubles are gone for the common currency as it is trying to form a bottom at the 1.08 level and the only thing that stands in between the 1.10 and above is the pivotal 1.0950-1.09 area.  On a clear break of that level gates are opened for a move into the 1.1400 and this should pressure the US dollar.  From now on this kind of a move should come only on the back of US data and monetary policy change and it implies the Federal Reserve in the United States is not going to hike rates any time soon or if they do market will act differently.  I am bullish on EURUSD at current levels and it is no wonder than I am buying call options with different expiration dates, the lowest one being end of day but also end of week and month as well.

Bank Of Canada Questioned On CPI Calculation

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Banc of CanadaAfter cutting rates last week the USDCAD pair flirted with the 1.30 level for almost a week now and in the end managed to trip the stops above the figure. There is still room to go for the pair to the upside as it seems to be extremely well bid on any dip. That being said, Bank of Canada is facing criticism on the back of how they calculate and interpret inflation as the method used is quite unique in modern economics in the sense that it is not taking into account seasonal adjustments as well as not considering price changes for all categories.  Nevertheless, the Canadian Dollar has been sold aggressively all over the board but I would still say the USDCAD pair is still offering a nice selling opportunity for the trader with a medium/long term horizon.

USDJPY Well Supported On Dips

Despite major revisions to the downside for the Industrial Production in the United States that made US stocks moving lower, USDJPY is finding buyers on each end every dip as market participants still have a hard time figuring lower equities and Fed rate hike probability.  From a technical point of view the USDJPY is in a corrective wave as after the 125.80 area came with the NFP (Non-Farm Payrolls) in June and from that moment nothing but large swings with the 120 level almost being broken to the downside.  I am still saying that most likely the USDJPY is going to trade the 120 level before making new highs and this is the trading plan heading into FOMC (Federal Open Market Committee) next week.

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Commodities Crash

Gold is plunging like a rock on Chinese selling news and the dip is so powerful that even the most bullish of the bulls should feel some pain.  I am a bit exposed there but so it was last month as well as from a technical point of view the pair is forming on the daily chart a running triangle and all we have to do is to wait for the b-d trend line to be broken before making a new decision to buy call options. Until then, watching the massacre and its implications for the Australian Dollar and Canadian Dollar is a lesson for every wannabe trader.  Not only gold is crashing but oil also is having a hard time standing on its feet as the Iranian nuclear deal effects are still weighing in on it. However, on the oil market I have some call options with end of month expiration date as it is still lagging the Canadian Dollar move.Option FM Banner New

Reserve Bank Of Australia On Hold

RBA (Reserve Bank Of Australia) is on hold with its monetary policy as the problem for Australia seems to come from China rather than from its own territory.  The thing is that the Chinese economy is heavily influencing the value of the Australian Dollar as more than one third of Australian exports are going to China.  Therefore, it is not surprising that the AUDUSD pair is sold every time it is trying to make a jump above the 0.7400 level as recent Chinese shocks sent some negative vibes on the pair as well.  From a technical point of view the AUDUSD pair is trying to carve a bottom after it ended a zigzag to the downside and now is forming an intervening X wave, or a connective X wave that should stretch all the way to the upper side of the resulting channel. This implies that the 0.80 level is going to be tested sooner rather than later and as a consequence I bought some AUDUSD call options with end of July expiration date.  Because we’re already in the second half of July, it means the expiration date is not that far away as it may appear.Tradorax Banner

EURUSD Recovering

After Greece reached a deal with its creditors it seems that all troubles are gone for the common currency as it is trying to form a bottom at the 1.08 level and the only thing that stands in between the 1.10 and above is the pivotal 1.0950-1.09 area.  On a clear break of that level gates are opened for a move into the 1.1400 and this should pressure the US dollar.  From now on this kind of a move should come only on the back of US data and monetary policy change and it implies the Federal Reserve in the United States is not going to hike rates any time soon or if they do market will act differently.  I am bullish on EURUSD at current levels and it is no wonder than I am buying call options with different expiration dates, the lowest one being end of day but also end of week and month as well.

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