The USD/CAD has been declining almost all week long. On Monday the currency pair tried to push above its 25-period and its 50-period moving averages, but failed to do so and has been trending lower ever since. Safe for the two attempts at the 25-period moving average on Tuesday and on Wednesday the Loonie was marking low after low until it reached 1.0060 on Thursday. The drop in the currency pair came in a response to the improved sentiment among investors, who shed their holdings in safe havens and moved to riskier assets. The worries about the strength of the global economy faded as some large corporations released earnings that topped market expectations. Even the weak economic data was not enough to bring down the enthusiasm among market participants, who were also buying on hopes that these bad economic data will prompt central banks to use more stimulus measures in the near future. Today we saw some bulls returning to the market as a wave of profit taking send the stocks lower. Moreover, the CPI figures for the Canadian economy were very disappointing. Consumer inflation declined by 0.4%, after increasing by 0.2% in the previous period. Analysts’ expectations consolidated around a more modest decline of 0.2%. The figures for the core CPI were also less than expected, coming at –0.4% when economists were expecting a decline of only 0.2%. The USD/CAD pared the majority of its weekly losses on the news and was even able to push above its 25-period moving average. The Loonie is currently standing at 1.0120, slightly below the highs of 1.0131 for the session. Support in the USD/CAD is provided by the lows we reached on Thursday, while resistance stands at the 50-period moving average around 1.0145. Oscillators are all trending higher with the relative strength index at 54 and the stochastic at 55. The MACD is issuing buy signals, which are yet to be confirmed by other technical indicators.
Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.
