Market Analysis: USD/CAD reacts to the Ivey PMIs today – will they disappoint?

  • master
  • 07.02.2019
  • Comments Off on Market Analysis: USD/CAD reacts to the Ivey PMIs today – will they disappoint?

Today our focus will be on the USD/CAD. The loonie gained some momentum against the greenback after USD/CAD traded as high as 1.3660/3670 at its highest levels since May 2017.

USD/CAD current events

Source: Economic Events February 6, 2019 – Admiral Markets’ Forex Calendar

Oil prices were an influence over the last few weeks, which recovered a little from more than 40% draw down within the fourth quarter of 2018, and was complimented by rising volatility in US equity markets within the same time span.

But with the Ivey PMIs (Purchasing Managers Index) today, the CAD could see some stronger headwinds with the USD/CAD taking on stronger momentum on the upside. Last month, the data set beat expectations, but employment and inventories disappointed and dropped. And after the BoC said at last month’s meeting that it expects the economy to grow at a slower pace in 2019 than earlier anticipated, chances seem high that the reading this month is likely to disappoint, too.

From a technical perspective, USD/CAD re-tested a significant trend line which probably offers an attractive risk-reward for USD/CAD bulls.

On the other hand, we have to remember that on a daily time frame USD/CAD stays bearish as long as we trade below 1.3370/3400 and finding a potential short-trigger already around 1.3180/3200 and a drop below 1.3080 would make a drop below 1.3000 very likely.

But, if the bulls manage to reconquer 1.3370/3400, further gains of up to 1.3670/3700 in the weeks and months to come seems to be a serious option.

USD/CAD daily chart movement

Source: Admiral Markets MT5 with MT5SE Add-on USD/CAD Daily chart (between November 13, 2017, to February 5, 2019). Accessed: February 5, 2019, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the USD/CAD increased by 9.4%, in 2015, it increased by 19.1%, in 2016, it fell by 2.9%, in 2017, it fell by 6.4%, in 2018, it increased by 8.4%, meaning that after five years, it was up by 28.4%.

Download MetaTrader 5 today, and begin trading!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.

Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.