Poloz’s Speech Affects USD/CAD, But Breakout Is Still Coming

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The CAD is in our focus today as Poloz, Governor of the Bank of Canada, has testified before the House of Commons Standing Committee on Finance in Ottawa.

“We have to count in the risks of waiting longer against the costs associated with doing something now, our best plan at this moment, we think, is to wait for the next 18 months or so.”

Very standoffish, and one can see why the CAD immediately rallied as the quotes first hit.

USD/CAD 5 minute

USD/CAD 5 minute

But as so often happens, sanity prevails as markets realise that these sorts of speeches are just full of empty rhetoric that has been said 100x before and we’re back on track in line with the technicals.

We normally take a look at USD/CAD alongside Oil due to their obvious correlation. But with today’s Poloz speech doing the damage we’ll let the pair stand on its own two feet.

USD/CAD weekly

USD/CAD weekly

The weekly highlights the obvious bullish trend that price has been rocketing north within for a good five years or so. The fact that it’s gone basically vertical is a little bit of a risk for bulls, as you can see by that pullback off its highs twelve months or so ago.

But while not quite pulling back to the original trend line, price has printed a new parallel line just above it which has held and given a bit of a bounce.

USD/CAD daily

USD/CAD daily

Zooming down into the daily chart where we can see today’s price action on the back of Poloz’s speech testing the upside of the short term channel.

I quite like the bullish nature of this test because it’s in the direction of the major trend and there seems to be some nice momentum behind the move if this 5 minute retrace is anything to go by.

Keep an eye on the @VantageFX Twitter for some intraday charts as we look to zoom down and find some entries. As always, don’t be afraid to share your own setups by attaching a chart and giving us a mention.

Have a great day!

This Tuesday

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EUR ECB President Draghi Speaks

This is a guest post originally appeared on Vantage FX. Reposted with permission.

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