ForexEzy
No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
No Result
View All Result
ForexEzy
No Result
View All Result
Home Forex Market Commentary

USD/CAD: Bearish Trend Continues, But Pullback Is Likely

by Tim Baudin
January 18, 2021
in Forex Market Commentary
0
USD/CAD: Bearish Trend Continues, but Pullback Is Likely
0
SHARES
11
VIEWS
Share on FacebookShare on Twitter
  • The USD/CAD has been in a steep downward trend.
  • This decline is mostly because of the high crude oil prices and the weak USD.
  • Bullish divergence hints at a potential pullback.

The USD/CAD pair is hovering near its lowest level since April 2018, ahead of the first Bank of Canada (BOC) interest rate decision of the year next week. It is trading at 1.2690, which is 13% below last year’s high of 1.4660.

High oil prices have supported the loonie

The USD/CAD has been on a strong downward trend mostly because of the higher crude oil prices. This week, the price of Brent has risen to more than $57 while that of the West Texas Intermediate (WTI) has risen to above $53. These are the highest they have been since March last year before the WHO named coronavirus a global pandemic. 

The Canadian dollar is an important oil currency because of the amount of crude oil that Canada exports. The country is the fourth-biggest oil producer in the world after the United States, Saudi Arabia, and Russia. Therefore, the currency does well when oil prices are higher because it leads to higher demand.

Oil prices have done well this year because of the falling inventories in the United States. In the past few weeks, data by the American Petroleum Institute (API) and the Energy Information Administration (EIA) have shown significant drawdown. 

Also, they have risen because of the voluntary supply cuts by Saudi Arabia. The country will start slashing 1 million barrels in February and March as it tries to prop-up prices. Further, investors have been optimistic about the recovery of the world economy because of the coronavirus vaccine. All these factors have been bearish for the USD/CAD pair.

Bank of Canada rate decision next

The next major event to watch will be the Bank of Canada (BOC) interest rate decision that will come out on Wednesday next week. In response to the pandemic, the bank has lowered rates to 0.25% and launched a $5 billion per week quantitative easing program. These measures, together with the stimulus offered by the government, have helped to cushion the economy.

In next week’s interest rate decision, investors and analysts believe that the BOC will leave interest rates unchanged at 0.25%. Also, it will maintain its current pace of asset purchases to sustain the recovery. However, there is a possibility that the BOC chair will signal when the bank will start tapering on its asset purchases or raise rates.

Still, the country is facing substantial challenges. For one, the number of coronavirus cases has continued to soar. And economic numbers have been less impressive. The latest employment numbers showed that the country lost more than 62,000 jobs in December because of the virus. This decrease was mostly due to job losses in the services sector.

Meanwhile, the USD/CAD will also react to change in policies in the US. This week, several Fed members signaled that the bank could start hiking rates or tapering asset purchases earlier than expected. In fact, the recent consumer price index data showed that the CPI was approaching the target of 2.0%. Therefore, a hawkish Fed could lead to a reversal.

USD/CAD technical analysis

The USD/CAD pair has been on a sharp downward trend. On the daily chart, it has moved below the 25-day and 50-day exponential moving averages and the descending blue trendline. The pair is also slightly below the important resistance level at 1.2990. 

It has also formed a bullish divergence pattern, as evidenced by the Relative Strength Index. Also, it seems to have formed a double-bottom pattern. Therefore, the pair will likely see a rebound in the near term.

USD/CAD technical analysis
ShareTweet
Previous Post

EUR/USD: Analysis Supports a Short Sell Into 2021

Next Post

MG Pro EA Review

Related Posts

USD/CNY: China Expected to Increase Retail Sales to Support the Yuan

USD/CNY: China Expected to Increase Retail Sales to Support the Yuan

by Tim Baudin
February 11, 2021
0

China has been the greatest beneficiary of the US-China trade war.Reduced consumption in China will lower economic output into 2021.A...

EUR/USD: Why the US Dollar Is Gaining Strength Against the Euro

EUR/USD: Why the US Dollar Is Gaining Strength Against the Euro

by Adam Stanley
February 8, 2021
0

Germany’s manufacturing index fell by 10% in 2020 as compared to 2019. New order levels are yet to return in...

EUR/TRY: Turkish Lira Poised to Strengthen with Soaring Exports

EUR/TRY: Turkish Lira Poised to Strengthen with Soaring Exports

by Richard Brase
February 8, 2021
0

The Turkish lira has gained more than 12% from December 2020 to February 2021.Export sales in Turkey rose by 2.5%...

USD/BRL: Brazil’s Low Rates and Positive Economic Pressure in 2021

USD/BRL: Brazil’s Low Rates and Positive Economic Pressure in 2021

by Tim Baudin
February 5, 2021
0

Brazil is expected to emerge from the high volatility witnessed in 2020.The push by the mining company Vale towards green...

EUR/JPY: Euro Expected to Ride on Positive CPI Data

EUR/JPY: Euro Expected to Ride on Positive CPI Data

by Adam Stanley
February 5, 2021
0

The EUR/JPY trading pair is expected to hit a new resistance above 130 due to robust European economic data.Japan’s reintroduction...

Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Best Forex EA

  • ROFX 9/10
  • Forex Fury 8/10
  • FXgoodway 7.5/10
  • Z Trader FX EA 7/10
  • Forex Incontrol Reborn 6.5/10

Popular News

  • The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    2 shares
    Share 2 Tweet 0
  • Rofx Review – High Profitability and Stable Performance Analysis

    29 shares
    Share 29 Tweet 0
  • The Best Forex Scalping Strategy – Using 3 Popular Technical Indicators

    0 shares
    Share 0 Tweet 0
  • The Best MT4 Indicators & Expert Advisors For Forex Trading

    2 shares
    Share 2 Tweet 0
  • How to check if the indicator is repainting?

    2 shares
    Share 2 Tweet 0

Trading

Footer

We are dedicated to demystify the world of forex trading for you – no matter what level you are on.

Categories
  • Automated Trading
  • Day Trading
  • Forex Basics
  • Forex Brokers
  • Forex Education
  • Forex Forecasts
  • Forex Indicators
  • Forex Market Commentary
  • Forex Robots
  • Forex Signals
  • Forex Tools
  • Forex Trading Strategies
  • Fundamental Analysis
  • Money Management
  • News
  • Risk Management
  • Social Trading
  • Technical Analysis
  • Top World Traders
  • Trading Psychology
  • Uncategorized
Tags
arbitrage atr bollinger bands cci chart patterns classics copy trading courses day trading forex brokers forex charts forex ea forex education forex forecasting Forex Indicators forex software reviews grid trading hedging ichimoku macd market cycles news trading oscillators price action trading rsi social trading strategies tips & tricks trading bots trading platforms trend trading Video
  • Terms of Use
  • Privacy Policy
  • Compensation Disclosure
  • Risk Disclosure
  • About Us
  • Contact Us

Copyright © 2020 by ForexEzy.com

No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog

© 2020, Forexezy.