10 minutes after the CPI release, the market price becomes irrelevant. Trade the market price to CPI to understand CPI is irrelevant. The market price knows today’s CPI number.
As CPI numbers drop, the release will provide less and less range to market prices. CPI will look like USD/CAD and the BOC at 40 pips or RBA and AUD/USD at 30 pips. And both central banks changed interest rates.
As we run through long-term forecasts, any requests are gladly filled and free of charge.
USD/CAD
The question to USD/CAD is, what’s the problem with a terrific currency pair stuck in tiny ranges and not moving to its full potential? USD/CAD for the past two years traded monthly ranges at 3 and 500 pips.
Deeply overbought USD/CAD trades in contention to a dropping DXY, severely overbought CAD/JPY and EUR/CAD and GBP/CAD trading at middle ranges. USD/CAD should trade much lower in relation to DXY’s drop from 114.00’s. While USD/CAD traded in relation to DXY at 114.00 highs in September but then rose 1000 pips.
USD/CAD Vs. EUR/CAD and GBP/CAD
USD/CAD runs +78% correlation to EUR/CAD, but EUR/CAD also runs +88% correlation to EUR/USD. USD/CAD is paralyzed to EUR/CAD movements, and EUR/USD is disabled to EUR/USD.
No need to run GBP/CAD correlations as the same results to correlations prevail. If one currency is affected, all are sympathetic to the same numbers, especially when the currencies are in the same universe.
USD/CAD Vs USD/JPY
Deeply overbought USD/CAD offers validation to short USD/JPY and DXY. USD/CAD is trading perfectly in tandem with USD/JPY at the current 137.72 Vs. 1.3628 or 1.3772 Vs. 1.3628.
USD/JPY offers USD/CAD above resistance points, while USD/CAD offers USD/JPY bottoms. USD/CAD averages driving current prices are at 1.2519, 1.2700’s, 1.3033, 1.3101, and 1.3416. All averages are severely overbought.
USD/CAD targets: 1.3346, 1.3238, 1.3203, and 1.3082. USD/CAD will continue to trade in 2 to 500 pip ranges, and USD/CAD ranges will match EUR/CAD and GBP/CAD, while CAD/JPY will easily outperform.
CAD/JPY
Averages holding CAD/JPY are from 95.00 to 89.00. CAD/JPY contains enormous trade ranges by almost 3 X USD/CAD. CAD/JPY from 103.00’s trades at the top of a 23-year range and targets 98.26, 96.07, and 95.03.
EUR/CAD
Significant averages are 1.4465, 1.4452, and 1.4447. Above 1.4400’s ranges from 1.4400s to 1.4800s. Below 1.4400s, it ranges from 1.4400’s to 1.4166, then 1.3831.
EUR/CAD last evening broke 1.4400s and traded to 1.4335 lows. EUR/CAD strategy is short highs below 1.4400’s.
GBP/CAD
GBP/CAD is the replica of EUR/CAD. GBP/CAD trades from 1.6392 to 1.6767 or 1.6767 and 1.6892 to 1.7300’s. GBP/CAD also broke last evening at 1.6767 and traded to lows at 1.6670. Trade strategy is short highs below 1.6767.