Talking Points:
– Bullish USD/CAD Outlook Vulnerable to Hawkish Bank of Canada (BoC).
– NZD/USD to Face Range-Bounce Prices Amid Failed Attempts to Close Below 0.7800.
– USDOLLAR Benefits From Upbeat Data- RSI Continues to Flirt With Overbought Territory.

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USD/CAD

Chart – Created Using FXCM Marketscope 2.0
Even though the Bank of Canada (BoC) is widely expected to retain its current policy, USD/CAD may face a larger correction should Governor Stephen Poloz show a greater willingness to raise the benchmark interest rate in 2015.
As a result, will wait for a bullish break in the Relative Strength Index (RSI) for a resumption of the bullish trend as USD/CAD remains capped around 1.1460-70 (100% expansion).
Will continue to view the DailyFX Speculative Sentiment Index (SSI) as a contrarian indicator as retail crowd has been net-short USD/CAD since the end of September, with the ratio currently holding at -1.35.

NZD/USD

NZD/USD slipped to 0.7783 as Fonterra Auction for Whole Milk Powder Prices fell 7.1%; will look for a further decline as RSI struggles to retain the bullish momentum from back in October.
May see the downward trending channel in NZD/USD gather pace as the Reserve Bank of New Zealand (RBNZ) is widely expected to keep the benchmark interest rate on hold at the December 10 policy meeting.
However, string of failed attempts to close below 0.7800 (38.2% retracement) may continue to generate range-bound prices in NZD/USD.

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Read More:
Australian Dollar Gains as RBA Talks Down Interest Rate Cut Speculation
December Forex Seasonality Sees USD Strength into Year End

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11397.81

11408.76

11344.08

0.38

119.34%

Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar Index climbs to a fresh monthly high of 11,408 amid the positive data prints; keeping a close eye on the RSI as it appears to be pushing back into overbought territory.
Despite the subdued outlook for inflation, seems as though central officials see weaker commodity prices having a more positive impact on growth amid recent comments from Fed Vice-Chair Stanley Fischer.
Despite the risk for a move back towards 11,120 (161.8% expansion) to 11,138 (61.8% expansion), the topside push in RSI may expose the next topside objective around 11,453 (61.8% expansion).

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Release

GMT

Expected

Actual

ISM New York (NOV)

14:45

55.0

62.4

Construction Spending (MoM) (OC)T

15:00

0.6%

1.1%

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— Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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Source: Daily fx