Canadian Balance of Trade: can it push the USD/CAD above 1.3500?
Source: Economic Events March 27, 2019 - Admiral Markets' Forex Calendar
As we pointed out in our technical analysis of the USD/CAD last Friday, the outlook for the currency pair is currently bullish, with a focus on the region around 1.3470 on the upside. So far, a break higher with a potential follow through up to 1.3670/3700 stands out, but is still on the table.
Today's US Balance of Trade data, covering the US and Canada, could be a potential driver. Last month, Canada's merchandise trade deficit widened to CAD 4.59 billion from December 2018, out of a downwardly revised CAD 1.98 billion from the previous month, relative to market expectations of a CAD 2.1 billion gap.
If today's data comes in below expectations of CAD -3.5 billion from last month's reading (the largest trade shortfall on record), it could fuel speculation that a slowdown in Canadian exports could result in an overall slowdown of economic activity, and the BoC could react with a move to devalue its currency.
As a result, the USD/CAD could likely be in for a significant attack of the region around 1.3470.
From a technical standpoint, a bullish outlook persists as long as USD/CAD trades above 1.3270, a downward break would activate the region around 1,3080.
Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD Daily chart (between December 22, 2017, to March 26, 2019). Accessed: March 26, 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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