Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Struggling Canadian Dollar Approaches 1.31

Published 03/16/2018, 08:22 AM
Updated 03/05/2019, 07:15 AM

The Canadian dollar has posted slight losses in the Friday session. Currently, USD/CAD is trading at 1.3091, up 0.29% on the day. On the release front, there are key indicators on both sides of the border. Canada releases Manufacturing Sales, with the markets braced for a sharp decline of 0.8%. In the US, major indicators are also expected to miss expectations. Building Permits and Housing Starts are forecast to drop to 1.32 million and 1.29 million respectively. The markets are also bracing for a drop in UoM Consumer Sentiment, which is expected to slow to 99.2 points. Traders should be prepared for some movement from USD/CAD during the North American session.

It continues to be a rough week for the Canadian dollar, which has lost 2.0% against its US counterpart. USD/CAD is headed towards the 1.31 level, as the Canadian currency is at its lowest level since late June. If Canadian Manufacturing Sales misses expectations, the slide could continue. As a minor currency, the Canadian dollar is under strong pressure, as risk appetite has waned due to two major geo-political hotspots. First, relations between the UK and Russia have nosedived after a toxic attack in London aimed against a former Russian intelligence officer was poisoned, and the UK has laid the blame on the Kremlin. The May government has ordered the expulsion of 23 Russian diplomats, and Russia is sure to retaliate. As well, President Trump has slapped tariffs on steel, and this could trigger a response from the EU and China. Although Canada was exempted from the tariffs, this could prove temporary, and the threat of a global trade war is not good news for Canada. Added to this mix is rising uncertainty over the NAFTA agreement. The US is demanding far-reaching concessions from Canada and Mexico, and the protectionist Trump administration could decide to exit NAFTA, which has been a key driver of economic growth for Canada. With the Federal Reserve poised to raise interest rates next week for the first time this year, the fragile Canadian dollar is looking at more headwinds.

USD/CAD Fundamentals

Friday (March 16)

*All release times are GMT

*Key events are in bold

USD/CAD for Friday, March 16, 2018

USD/CAD

USD/CAD, March 15 at 7:35 EST

Open: 1.3053 High: 1.3089 Low: 1.3046 Close: 1.3089

USD/CAD Technicals

S3 S2 S1 R1 R2 R3
1.2865 1.2920 1.3014 1.3165 1.3260 1.3350

USD/CAD was flat in the Asian session and has edged higher in European trade

  • 1.3014 is providing support
  • 1.3165 is the next line in resistance
  • Current range: 1.3014 to 1.3165

Further levels in both directions:

  • Below: 1.2920, 1.2865, 1.2757 and 1.2630
  • Above: 1.3014, 1.3165, 1.3260 and 1.33

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Friday session. Currently, short positions have a majority (63%), indicative of trader bias towards USD/CAD reversing directions and moving lower.

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.