Saturday, April 22, 2017 10:11 AM EDT
Fundamental Forecast for CAD: Bearish
The Canadian dollar looks likely to test its recent low against the USD, opening the way for further falls. Price action this week had been driven by a slightly weaker oil complex, pushing the Loonie lower, along with ongoing trade wrangles with the US.
In a recent trip to Wisconsin, US President Donald Trump promised to defend the US dairy industry against what he called Canada’s protectionist trade policies. President Trump added that it is another example of a one-sided deal against the US and that “it’s not going to be happening for long.”
The news is not all negative for the Canadian Dollar with the latest Bank of Canada policy meeting (April 12) producing a slightly hawkish tone. Bank of Canada senior deputy governor Carolyn Wilkins said in her opening statement that “many of the economic data that we have seen since our last MPR have been stronger than expected,” adding that “is certainly a welcome change.” Canada’s economy is expected to grow by 2.5% this year and just below 2% in 2018 and 2019.
On the charts, the March 9 USDCAD high looms large, with a break higher leaving room for the pair to move gains made in early 2016.
Chart: USDCAD Weekly Timeframe (August 2015 – April 2017)
Chart by IG
Disclosure:
- Check out our NEW DailyFX
more
Disclosure:
If you’re looking for trading ideas, check out our Trading Guides. And if you’re looking for ideas that are more short-term in nature, please check out our IG Client Sentiment Indicator.
Paul conducts webinars geared towards equity indices and commodities every Tuesday, for details see the Webinar Calendar
Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below. What will drive the US Dollar trends through June? See our forecast to find out!
Are retail traders buying or selling the US Dollar, and what does say about the trend? Find out here! DailyFX, the free news and research website of leading forex and CFD broker FXCM, delivers up-to-date analysis of the fundamental and technical influences driving the currency and commodity markets. With nine internationally-based analysts publishing over 30 articles and producing 5 video news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to one of the most powerful economic calendars available on the web, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who heavily rely on the news for their trading strategies. Additionally, DailyFX serves as a portal to one the most vibrant online discussion forums in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk about serious trading.
Any opinions, news, research, analyses, prices, or other information contained on dailyfx.com are provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
less
How did you like this article? Let us know so we can better customize your reading experience.