USD/CAD: waiting on the Fed's meeting
Now in many ways CAD is the gift that just keeps on giving. Poloz is so unpredictable that he creates plenty of opportunities as the market tries to second guess his next move. This time is no exception as yesterday he seemed to have slipped from a dovish holding of rates to a confident expectation of more rate hikes to come. Check out Adam's post here.
So, how to play this? For me USD/CAD short is the trade. However, what is stopping me is that the FOMC rate statement and announcement is coming out later today. It is not NAFTA - that deal will be delayed, or done - it is not going to be dumped. However, the FOMC is uncertain for me - the US is doing well and I could see a bullish outcome from either the meeting or the rate. Too much risk to hold for me. However, after the meeting has been and gone - and assuming the current status quo is maintained - then USD/CAD is in a good technical place for a short. Price is at supply, after a previous break of a daily swing low and stochastic are turning more and more bearish. Looks very good for another leg down. Good for a couple of hundred pips. Ok, stops at 1.3000 and we are good to hold. So, in summary - wait for FOMC, interpret the decision and trade or stay out.
