Source: Economic Events February 8, 2019 – Admiral Markets’ Forex Calendar
After taking a close look at the USD/CAD in our technical piece on Wednesday, we want to apply the Canadian employment data released today to reinforce our analysis of the USD/CAD.
In that piece last Wednesday, we pointed out that after a mixed Ivey PMI data set in January and the sceptical BoC on the Canadian economic outlook, “[…]chances seem high that the reading (Ivey PMIs) this month is likely to disappoint, too.[…]”
And the data did disappoint with a print of 54.7 for January, down from 59.7 from the prior month, markedly lower than market expectations of 56.
But, Deputy Governor of the BoC Timothy Lane stated in a speech titled “Taking Precautions: The Canadian Approach to Foreign Reserves Management“, that the BoC is closely monitoring the relatively recent use of CAD as foreign currency by other nations, that past sharp CAD exchange rate movements have helped the Canadian economy to adjust to shocks, and that the BoC is ready to intervene in markets if necessary.
That last quote was taken particularly dovish in combination with the BoC statement in January, and USD/CAD took on serious momentum against the trend line also discussed last Wednesday.
Even though the wider technical picture hasn’t been significantly impacted on a daily time frame, chances have significantly increased that bulls will at least try to reconquer 1.3370/3400 in the near future. If they succeed, further gains of up to 1.3670/3700 in the weeks and months to come are to be favoured.
Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD Daily chart (between November 13, 2017, to February 7, 2019). Accessed: February 7, 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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