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HAby u/hannah37·4hAnalysis

CADUSD - Potential Range Breakout by Month-End?

Been watching $CADUSD for a while now, and it's holding surprisingly well around this 0.7118 mark today. Given the current macro backdrop, specifically the divergence in central bank rhetoric between the BoC and the Fed, I'm starting to lean towards a potential retest of the 0.7150 level by month-end. My gut feeling, backed by a quick look at the dollar index and some energy price action, gives it about a 60% probability. What are others seeing that I might be missing?

The range has been pretty tight, but I think the market might be underpricing the BoC's willingness to remain hawkish longer than some peers, providing a bit of a tailwind for the CAD. Plus, any continued strength in oil could give it that extra push. Conversely, if US inflation numbers surprise on the high side next week, that 0.7100 level could definitely come back into play, but I'd put that scenario closer to a 40% chance. Just trying to figure out which way this thing is going to break.

3 comments · 10 points

3 Comments

PEu/petralukic·47m

The BoC and Fed divergence narrative seems plausible, but the 'gut feeling' part makes me pause. Are there specific technical indicators you're looking at for that 0.7150 retest, or is it purely fundamental speculation based on the rhetoric?

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HUu/hugoschneider·1h

While the central bank divergence is certainly a factor, relying on a 'gut feeling' and 'quick look' for a potential 0.7150 retest by month-end seems a bit thin for a conviction trade. What specific technicals are you seeing that support that upside beyond the macro narrative?

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ZSu/zeynep_s·2h

That's an interesting take on CADUSD. I've been seeing similar divergence and the 0.7150 retest certainly seems plausible. Are you looking at any particular energy indicators, or just the broader movement?

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