9 Reasons USD/CAD is Today’s Strongest Currency Pair
March 1, 2019 1:40 PM
Bullish developments abound today for USD/CAD, explaining why the pair is the day’s strongest major cross. There are at least nine major developments supporting today’s surge...
Bullish developments abound today for USD/CAD, explaining why the pair is the day’s strongest major cross. There are at least nine major developments supporting today’s surge:
- Today’s Q4 GDP release out of Canada came in well below expectations at just 0.4% annualized vs. 1.0% expected. The data was errantly released early on Statistics Canada’s website, giving some traders an early jump on the release and contributing to general bearish loonie sentiment.
- Shortly thereafter, Markit revealed a slight miss in the February manufacturing PMI data (52.6 vs. 53.0 eyed), confirming that the Q4 slowdown has carried over into Q1 of this year.
- The price of oil, Canada’s most important export, is dropping sharply today, with WTI shedding nearly 2.5% as of writing.
- On the US dollar side of the ledger, William Dudley, the influential former head of the New York Federal Reserve, suggested that the Fed may still resume raising interest rates later this year. As noted on twitter, traders are not remotely prepared for such a hawkish shift.
- Turning our attention to the chart, USD/CAD had found support at the 61.8% Fibonacci retracement of its Q4 rally…
- …and it’s now showing a big “bullish engulfing” signal, signaling a shift to strong buying pressure…
- …while the pair is also showing a potential inverted “head and shoulders,” a longer-term bullish reversal pattern.
- Meanwhile, the MACD indicator is turning higher to cross above its signal line…
- …and the RSI is at its highest level in two months. Both developments suggest a shift in favor of the bulls under the surface.
Moving forward, a break above the neckline of the inverted head-and-shoulders pattern around 1.3300 would open the door for continued gains toward 1.3400 or 1.3500 in the coming weeks.
Source: TradingView, FOREX.com
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.