The USD/CAD still fighting with 1.3500 mark – a tug of war?

Maj 15, 2019 12:30

Source: Economic Events May 15, 2019 - Admiral Markets' Forex Calendar


The focus for the USD/CAD still lies on the 1.3500 mark, and a significant break higher couldn't yet be had. There are several reasons for this: for example, last Friday, Canada posted the largest one-month gain in net jobs on record, countering some of the rhetoric we've seen from the Bank of Canada, which fully abandoned its bias towards raising interest rates during April 24th's meeting.

But the US dollar also faced some headwinds over the last few days: after the trade war with China further escalated, China announced a plan to raise tariffs on $60 billion of US goods beginning June 1, halting the purchase of US agricultural products and energy, reducing orders from Boeing, restricting US service trade, and especially discussing the possibility of dumping US Treasuries - as such, the US dollar saw some heavy selling this week.

This resulted out of the fact that market participants now see an increased chance of the Fed cutting rate by December 2019, with probability being over 70% according to the Fed Watch Tool.

Since a trade war escalation will potentially hit a commodity dependent currency like the CAD a bit more heavily than others, we still see a serious chance of a coming break above 1.3500 in the USD/CAD.

Today, a potential driver can be found coming from the Canadian inflation data. It came in at 1.9% last March, up from 1.5 percent in February, matching market expectations and showing the highest inflation rate since December. A down tick in this area, if it comes in below market expectations of 2%, would leave the CAD vulnerable to a drop, and push the USD/CAD for a stint higher.

In general, as long as we trade above 1.3250/80 on a daily time-frame, the USD/CAD stays bullish, above 1.3500 with an initial target around 1.3670.

Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD chart (between February 18, 2018, to May 14, 2019). Accessed: May 14, 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%.


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.
  9. 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 Vse rešitve na enem mestu za porabo, investiranje in upravljanje denarja

Več kot samo broker, Admirals je finančno središče, ki nudi široko paleto finančnih produktov in storitev. Omogočamo vam upravljanja vaših osebnih financ preko enkratne združene rešitve, ki omogoča investiranje, porabo in upravljanje denarja.