Article by ForexTime
The USDCAD has been the trade of Monday as we’ve seen a major technical breakout on the charts. This is surprising for the most part as the USD has not had a great day against most of the major pairs, but it’s becoming clear that the recent tariffs imposed by Trump are having a flow on effect for the Canadian economy. One of the other major other points is of course NAFTA, which the US continues to push hard to see large changes made for Canada and Mexico as it deems it to be unfair. It seems certain that an impasse is going to be reached as negotiations go back and forth and the US continues to become more hostile on free-trade. I would expect the Bank of Canada to comment on the uncertainty this week as a result putting pressure on the Canadian Dollar, and also that no interest rate movement takes place – but nearly all traders will be focused on the comments that come out as a result of recent actions taken from the US.
USDCAD traders are certainly very bullish and after some strong tests on resistance at 1.2921 we’ve finally see a breakaway for the bulls. It looks likely we will now see a test of the 1.30 resistance level and the potential to move to the next resistance level at 1.3200 if the bulls continue to run. One scenario is that we could see a new candle open and a bounce of the 1.2921 level, but if it does not push through then this would be a strong bullish signal in the short to medium term. If the bears do manage to claw it back then support levels can be found at 1.2921 and 1.2800, with the 200 day below this likely to also act as dynamic support.
One of the other interesting movers today has been the S&P 500, which in recent times has been a favourite of mine. While the trade wars go on, and the FED is looking to lift rates, we are still seeing large volatility and uncertainty that the market is actually bearish at present. Certainly there has been a lot of interest around the moving averages at present which keep fighting back of bearish movements to the point where it seems like the bulls may come back into the market. I’m a little uncertain they can in the long run, but there are still strong opportunities for traders in US equities as they play of key levels.
Article by ForexTime
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com