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.
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.
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%.
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