USD/CAD takes on momentum again – employment in focus on Friday
Source: Economic Events February 8, 2019 - Admiral Markets' Forex Calendar
After taking a close look at the USD/CAD in our technical piece on Wednesday, we want to apply the Canadian employment data released today to reinforce our analysis of the USD/CAD.
In that piece last Wednesday, we pointed out that after a mixed Ivey PMI data set in January and the sceptical BoC on the Canadian economic outlook, "[…]chances seem high that the reading (Ivey PMIs) this month is likely to disappoint, too.[…]"
And the data did disappoint with a print of 54.7 for January, down from 59.7 from the prior month, markedly lower than market expectations of 56.
But, Deputy Governor of the BoC Timothy Lane stated in a speech titled "Taking Precautions: The Canadian Approach to Foreign Reserves Management", that the BoC is closely monitoring the relatively recent use of CAD as foreign currency by other nations, that past sharp CAD exchange rate movements have helped the Canadian economy to adjust to shocks, and that the BoC is ready to intervene in markets if necessary.
That last quote was taken particularly dovish in combination with the BoC statement in January, and USD/CAD took on serious momentum against the trend line also discussed last Wednesday.
Even though the wider technical picture hasn't been significantly impacted on a daily time frame, chances have significantly increased that bulls will at least try to reconquer 1.3370/3400 in the near future. If they succeed, further gains of up to 1.3670/3700 in the weeks and months to come are to be favoured.
Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD Daily chart (between November 13, 2017, to February 7, 2019). Accessed: February 7, 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%.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
