Market Analysis: Ivey PMIs and BoC in focus – USD/CAD about to reconquer 1.3400?
Source: Economic Events March 6, 2019 - Admiral Markets' Forex Calendar
After holding its trendline on a daily time frame, USD/CAD is now eyeing a key resistance region around 1.3350/3370 again. Today's economic calendar delivers several Canadian data sets (including a rate decision) which could act as a driver to push it higher.
Last month's Canadian Ivey PMIs read 54.7 for January, indicating the lowest value since September of last year. Another disappointing reading (driven by a further decrease in supplier deliveries or employment), could trigger further weakness for the CAD.
In addition to this, the BoC's rhetoric will be of interest, particularly after 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, and that past sharp CAD exchange rate movements have helped the Canadian economy adjust to shocks - however, the BoC is ready to intervene in markets if it deems it necessary.
If the BoC decides to further fuel speculation of a more dovish stance in the near future, a break above 1.3400 in USDCAD could be expected, and an initial target on the daily time frame of around 1.3670/3700 is activated.
In general, the mode for the USD/CAD stays bullish as long as the currency pair trades above 1.3100.
Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD Daily chart (between December 12, 2018, to March 6, 2019). Accessed: March 6, 2019, at 08:00 AM 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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