The USDCAD pair retains bull pressure as it looks for further corrective recovery. The USD/CAD spiked into two-week highs following the US Fed’s rate hike on Wednesday, testing 1.305/1.307 levels heading into Thursday’s overnight session. The US Federal Reserve pushed the US interest rate to 2.25% on Wednesday, and the US Dollar stepped up further against the Loonie, continuing the USD/CAD’s bullish recovery from last week’s bottom of 1.2884. As of writing this article, the USDCAD pair is trading at 1.3060 up 0.31% on the day. NAFTA re-negotiations continue to spiral out, with the US and Canada increasingly entrenched in immovable positions on trade talks, leaving the Dollar-Loonie pairing to spiral out as headlines send CAD traders’ sentiment back and forth on the issues.
NAFTA Continues To Remain Primary Focus of CAD Investors
US President Donald Trump is again threatening to impose tariffs on Canadian-manufactured automobiles as the US’ president, who campaigned on a platform of skillful negotiation and impressive deal-making, complains that he is unable to gain any ground with Canadian negotiators, threatening to derail the entire process with stiff economic sanctions and threatening to outright abandon NAFTA in favor of bilateral deals. However Mexico’s stance is unclear as they have agreed to terms of a deal in previous negotiations while commenting that they aren’t ready to sign a NAFTA deal without Canada.
Having defended a short-term ascending trend-line on the 1-hourly chart, a sustained move beyond the 200-hour SMA and the key 1.30 psychological mark was seen as a key trigger for bullish traders. Technical indicators on hourly charts have already moved into near-term overbought conditions but are yet to catch up with the positive momentum on the daily chart. Hence, the bullish trajectory seems more likely to take a brief pause ahead of today’s important US macroeconomic releases – the final Q2 GDP print and durable goods orders. The US Dollar is recovering back into September’s opening prices as the USD/CAD continues to cycle around the 1.31 major technical level for a second month straight, with Daily candles marking out a rough sideways channel from 1.2850 to 1.3200, with support coming from the 200-day SMA currently sitting at 1.2870.
This article was originally posted on FX Empire
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