USD/CAD Technical Analysis, Canadian dollar forecast ► review of the major events that move the Canadian dollar (loonie) during the upcoming week. Here is some general information. Scroll down for the latest USD/CAD outlook
The Canadian dollar, aka “the loonie” (for the loon on the flipside of the coin) is a commodity currency. Canada’s chief export is oil and fluctuations in the “black gold” move the C$ as well. This also makes it a risk currency, moving not only with crude oil but also with stocks. However, the C$ also depends heavily on US demand, as the southern neighbor is the biggest trading partner. Trump’s trade wars hurt CAD.
Dollar/CAD tends to react relatively slowly to significant Canadian data. This allows a better level playing field for retail traders to jump into the trade. Even the Canadian jobs report tends to result in a relatively long move.
$/C$ technical trading is OK: not tough and choppy but neither fully respecting lines of support and resistance.
Dollar/CAD Recent Moves
Since the big fall in oil prices in late 2014, Dollar/CAD is trading at higher levels. The Bank of Canada cut interest rates twice. The new government led by Justin Trudeau enacted fiscal stimulus, a rarity in the Western world. This takes some of the burdens off the shoulders of Stephen Poloz, the BOC governor.
The ascendancy of Trump to power boosted USD/CAD. The greenback enjoyed hopes for fiscal stimulus and the Canadian dollar suffered from worries about trade. Yet in 2017, the “Donald Disillusion” has a negative impact on the USD. So, USD/CAD is trading more steadily.
Also, watch out for the worries about elevated housing prices in Vancouver and also in Toronto with the HCG issue causing a stir. However, the negative mood may have peaked.
USD/CAD is not moving too far from the 1.30 level, down from the 1.47 peak but way above the near-parity levels.