Sample Category Title

Pivot (invalidation): 15.2900

Our preference Long positions above 15.2900 with targets at 15.4200 & 15.4600 in extension.

Alternative scenario Below 15.2900 look for further downside with 15.2300 & 15.1400 as targets.

Comment The RSI is mixed to bullish.

Pivot (invalidation): 1409.00

Our preference Long positions above 1409.00 with targets at 1419.00 & 1424.00 in extension.

Alternative scenario Below 1409.00 look for further downside with 1405.00 & 1400.50 as targets.

Comment The RSI is mixed to bullish.

Canada will publish June inflation data on Wednesday at 12:30 GMT as well as retail sales numbers for May on Friday, also at 12:30 GMT. Following, the Bank of Canada's surprisingly overcautious tone at the last policy meeting, investors will be watching to see if the upcoming data support the Bank's view that the recent uptick in growth and inflation is temporary. However, that may still not be enough to halt the Canadian dollar's advance against the US dollar, which is facing much deeper bearish bets.

BoC sees recent strong data as temporary

The headline rate of inflation in Canada unexpectedly jumped to 2.4% year-on-year in May, casting serious doubt on the likelihood of a rate cut by the Bank of Canada. The strong data was soon followed by upbeat monthly GDP estimates, further dashing expectations that the BoC would soon join the US Federal Reserve in lowering rates.

However, whilst many would have expected Governor Stephen Poloz to strike a somewhat more upbeat tone at the June 10 policy meeting, and perhaps even leave the door open for a rate hike, the emphasis was on the downside risks to the Canadian economy from the trade tensions. The BoC sees the pick-up in both growth and inflation to be temporary and is increasingly worried about the outlook. Wednesday's CPI figures will likely reinforce this view.

CPI to fall back in June

The CPI rate is forecast to have declined by 0.2% month-on-month in June, cutting the annual rate to 2.0% in June from the prior 2.4%. The BoC will of course also be watching its three preferred measures of core inflation. In May, CPI trim and CPI median edged above the midpoint of the Bank's 1-3% target band, though CPI common remained unchanged at 1.8%. Policymakers are likely to wait for these measures to dip back below 2% before considering a rate cut.

Solid retail sales expected for May

Looking at the retail sales numbers, however, they're not predicted to raise any concerns about the growth picture just yet (though it should be pointed out that the figures to be released are for May and not June). Retail sales are forecast to have risen by 0.3% m/m in May, accelerating from the prior 0.1%. They should provide a good clue to the next monthly GDP print, due on July 31.

Strong loonie could worry BoC

If growth remains solid and inflation doesn't diverge too far from 2%, the Bank of Canada is likely to stay on hold. One factor, however, that could complicate matters for the BoC is the exchange rate. The loonie is one of the best performers versus the greenback this year (+4.3% year-to-date), recently brushing an 8½-month high of C$1.3014 to the US dollar.

A strong loonie would be quite harmful for Canada's exports, given that three quarters of them go to the United States. It would also weigh on inflation by keeping import costs down. Hence, more advances in the loonie could prompt the BoC to take action to curb further appreciation, especially if there's no improvement on the trade war front.

Looking at the near-term picture, however, for dollar/loonie, the pair is at risk of breaching immediate support around 1.3012 – the 261.8% Fibonacci extension of the upleg from 1.3353-1.3564 – if this week's data is broadly positive. If that region is broken, the slide could continue until 1.2880 – a previous support level.

But should the inflation and retail sales reports disappoint and increase bets of a BoC rate cut in the coming months, dollar/loonie could rebound initially to around 1.3140 – a recent resistance point, before aiming for the 161.8% Fibonacci at 1.3223.

Pivot (invalidation): 3000.00

Our preference Long positions above 3000.00 with targets at 3023.00 & 3032.00 in extension.

Alternative scenario Below 3000.00 look for further downside with 2988.00 & 2973.00 as targets.

Comment The RSI is bullish and calls for further advance.

Pivot (invalidation): 12344.00

Our preference Long positions above 12344.00 with targets at 12450.00 & 12490.00 in extension.

Alternative scenario Below 12344.00 look for further downside with 12300.00 & 12260.00 as targets.

Comment The RSI is bullish and calls for further advance.

Daily Pivots: (S1) 0.7021; (P) 0.7030; (R1) 0.7049; More...

No change in AUD/USD's outlook. Intraday bias remains on the upside with focus on 0.7047 resistance. Break will resume the rebound from 0.6831 and target 61.8% retracement of 0.7295 to 0.6831 at 0.7118. Sustained trading above will pave the way to 0.7205 resistance next. On the downside, break of 0.6983 minor support will turn bias to the downside for 0.6910 support instead.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

Pivot (invalidation): 5.7200

Our preference Short positions below 5.7200 with targets at 5.6950 & 5.6790 in extension.

Alternative scenario Above 5.7200 look for further upside with 5.7330 & 5.7580 as targets.

Comment A break below 5.6950 would trigger a drop towards 5.6790.

Pivot (invalidation): 0.7045

Our preference Short positions below 0.7045 with targets at 0.7020 & 0.7010 in extension.

Alternative scenario Above 0.7045 look for further upside with 0.7060 & 0.7080 as targets.

Comment The RSI shows downside momentum.

Daily Pivots: (S1) 1.3029; (P) 1.3041; (R1) 1.3062; More....

A temporary is formed at 1.3018 with current recovery and intraday bias in USD/CAD is turned neutral again. Near term outlook remains bearish as long as 1.3143 resistance holds. Sustained trading below 1.3052/68 cluster support should confirm medium term reversal. Deeper decline should then be seen to 1.2781 support next. Nevertheless, break of 1.3143 resistance will confirm short term bottoming and bring stronger rebound.

In the bigger picture, the case of bearish reversal continues to build up. Decisive break of 1.3068 cluster support (38.2% retracement of 1.2061 to 1.3664 at 1.3052) will confirm completion of up trend from 1.2061 (2017 low). Further fall should be seen to 61.8% retracement at 1.2673 next. On the upside, sustained break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685, is needed to confirm resumption of up trend from 1.2061 (2017 low). Otherwise, risk will stay on the downside.

Pivot (invalidation): 1.3035

Our preference Long positions above 1.3035 with targets at 1.3070 & 1.3085 in extension.

Alternative scenario nBelow 1.3035 look for further downside with 1.3015 & 1.3000 as targets.

Comment The break above 1.3035 is a positive signal that has opened a path to 1.3070.