- Investors sense fresh trade tussle as China halts all meat imports from Canada.
- Early-month low near 1.3242 caps latest recovery, highlights 1.3150 support.
With China blocking the Canadian meat from entering its land, the USD/CAD pair takes the bids near 1.3185 during the early Asian session on Wednesday.
Reuters reports that the Chinese embassy in Canada recently confirmed that the former has completely halted the meat imports from the later after the pork was found with ractopamine residue.
It was further mentioned that fake veterinary health certificates for meat products were found by the Chinese authorities that pushed the dragon nation towards shutting the door for any Canadian meat products. The news report also cited Chinese push to Canada’s government towards taking steps to “reduce the negative impact on the reputation of its products in order to restore the confidence of Chinese consumers.”
The issue at hand might have had a lesser impact on the markets in any other scenario than the present trade tensions. The Canadian Agriculture Minister is still to respond to recent allegations and will be observed for sure.
Elsewhere, policymakers from the US Federal Reserve are on the wire off-late, flashing mixed signals concerning the central bank’s future monetary policy moves. St Louis Federal Reserve Bank President James Bullard recently shifted from its previous less dovish stance indicating the likelihood of two rate cuts during the year.
Technical Analysis
Latest lows surrounding 1.3150 can act as immediate support for the pair during its fresh downturn, a break of which highlights 1.3100 and February month low near 1.3070 as the key rest-points.
Should prices hold recent recovery, a sustained break of early-month low near 1.3242 becomes necessary to validate the pair’s run up towards 200-day moving average (200-MA) level around 1.3283.
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