USDCAD Drop Could Extend On Forex News

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Written By: Angeline Feliciano
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    Summary:
  • BOC Governor Poloz allowed the Loonie, to take flight on the charts yesterday. Will retail today's sales reports do the same?

The Canadian dollar was the only one among the major currencies that posted a win against the US dollar yesterday. USDCAD was testing resistance around its weekly highs at 1.3323 when the currency pair dropped over 50 pips to an intraday low of 1.3268. By the day’s close, USDCAD was down 17 pips at 1.3282.

The biggest forex news in yesterday’s New York session was Bank of Canada (BOC) Governer Stephen Poloz’ speech. He hinted that rate cuts may not be on the central bank’s agenda this year. In his speech at the Ontario Securities Commission, he remarked that Canada’s monetary policy is appropriate in the face of global trade tensions.

His comments were especially bullish for the CAD because they came after BoC Senior Deputy Governor Carolyn Wilkins’ dovish remarks on Tuesday. According to her, recent developments abroad could adversely affect the Canadian economy and they may cut rates.

Retail sales due today

For today, forex traders will be keeping an eye out for consumer spending reports from Canada at 1:30 pm GMT. The headline retail sales number is expected to show a 0.3% decline in September. Meanwhile, the core retail sales report is eyed at -0.1%.

USDCAD Outlook

The daily chart of USDCAD shows that resistance held at the falling trend line (connecting the highs of September 2, October 3, and November 20). Better-than-expected figures will only confirm Poloz’ confidence and could push USDCAD down to this week’s lows below 1.3200.

On the other hand, disappointing data could spark a rally above this week’s highs. If that happens, look for the currency pair to find resistance at 1.3380 where it made highs on September 3.Download our latest quarterly market outlook for our longer-term trade ideas.

Written By: Angeline Feliciano

Angeline Feliciano has been trading Forex for over ten years. She has invaluable experience working in FX education companies like BabyPips.com and Learn to Trade as a trader, currency analyst, trading coach, and presenter. Aside from these roles, she has also created intensive educational content on fundamental analysis which is heavily sought after by retail traders. She has taught hundreds of people how to trade the FX market in the Philippines and in Australia. When she is not trading, you can find her in the gym lifting weights.

Published by
Written By: Angeline Feliciano