The George Davis Report: August 2021 Edition

By George Davis, CMT
Published August 17, 2021 | 8 min watch

A monthly video series on the trajectory of the Canadian dollar

Don’t miss this month’s edition of the George Davis Report, where George discusses an overshoot in USD/CAD and event risk in the weeks ahead.

 

What you need to know

1

A Fed shift at their June meeting produced a bullish long-term trend reversal for USD/CAD.

2

This, along with positioning and “peak growth” concerns caused an extension to 1.2800 in July.

3

Vaccination progress and the current pricing for central bank policy moves suggest that the move to 1.2800 was an overshoot.

4

The Fed’s Jackson Hole Economic Policy Symposium and the September policy meeting serve as near-term risks, with further crystallization of the tapering process likely to provide another boost for the USD.

5

The trend reversal in USD/CAD points to a shift in the hedging pendulum as a return toward the low near 1.2000 is unlikely.

For the trading range:

USD/CAD

Buyers

1.2300/1.2400

Sellers

1.2700/1.2800

This video is part of our monthly George Davis Report series, with ad hoc reports brought to you as current.


George Davis, CMT

George Davis, CMT
Chief Technical Strategist, Fixed Income, Currencies & Commodities, RBC Capital Markets


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