Break ahead: the USD/CAD eyeing 1.3000 and new yearly lows

Juli 17, 2019 11:30

Source: Economic Events July 17, 2019 - Admiral Markets' Forex Calendar


The USD/CAD is currently eyeing a technically interesting level: the region around 1.3000.

A break lower could level the path down to 1.2780, which is definitely an option after last week. On Wednesday, comments made from US Fed chairman Powell at his testimonial before the House Financial Services Panel impacted the currency pair, while at the same time the BoC published their latest monetary policy statement.

While Powell said that a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit, there is a risk that weak inflation will be even more persistent than the Fed currently anticipates, which brings back speculations of a 50bp rate cut from the Fed by the end of July. The BoC left interest rates at 1.75% on hold, even though they said that recent Canadian economic strength is not sustainable.

Still, the BoC statement didn't clearly point to lower borrowing costs in the near-term similar to the Fed, which leaves the CAD as a potential strong performer against the USD, especially if inflation data today at 1230pm GMT comes in above 2% (as expected).

In fact, a higher than expected inflation reading is a serious option with WTI having gained more than 15% in June against the mark of 50 USD per barrel:

Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD Daily chart (between April 27, 2018, to July 16, 2019). Accessed: July 16, 2019 at 10:00 PM GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the USDCAD 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%.


Investing in Forex with Admiral Markets

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.
Avatar-Admirals
Admirals Eine Komplettlösung für das Bezahlen, Investieren und Verwalten Ihres Geldes

Admirals ist mehr als ein Broker. Wir sind der Dreh-und Angelpunkt für Ihre Finanzen, indem wir Ihnen eine breite Palette von Finanzprodukten und -dienstleistungen anbieten. Wir machen es möglich, persönliche Finanzen durch eine Komplettlösung für das Investieren, Ausgeben und Verwalten von Geld anzugehen.