The Canadian Dollar, ” Talking Points
USD/CAD pares the decline from earlier this month, the little-reaction-to-the-1.994 M decline of Employment in Canada, and the exchange rate may continue to follow the April of the range, the axis, the Bank of Canada (Boc) Governor Stephen Poloz prepares to depart from the central bank.
The pair USD/CAD Rate Tracks, April is brought Before the Governor of the Boc is Very
USD USD USD USD/CAD approaches the value of-high (1.4173) as he carves a new series of higher highs and lows, but the exchange rate may trade within a defined range in May, as Boc Governor Poloz steps down in June.
It remains to be seen if Canada’s Employment report will have an influence on the monetary policy that the update showed, the biggest decline since the data series began in 1976, and the economic shock of COVID-19 may put pressure on the Boc to implement more non-standard measures such as the unemployment rate jumps to 13.0%, from 7.8% in March.
In turn, the bank may continue to endorse a dovish forward guidance at its next meeting, on 3 June, as The Vice-Governor Of Carolyn Wilkins warns that “this situation will cause the Canadian gross domestic product to plunge as much as 15% to 30% in the second quarter compared to its level at the end of 2019and the central bank is under Tiff Macklem can continue to push monetary policy into uncharted territory as theThe Governing Council stands ready to adjust the size or the duration of its programs, if necessary.”
That said, the Canadian Dollar could face headwinds throughout 2020, the Boc keeps the door open to deploy further unconventional tools, and the overall outlook for the USD/CAD remains constructive as the exchange rate escapes from the descending channel from earlier this year.
However, the pair USD/CAD may consolidate throughout May, as the decline from the monthly high (1.4173) stands before the April low (1.3850), and the exchange rate may trade within a defined range, in the middle of the chain of the failure of attempts to break/close above 1.4260 (23.6% retracement) of the area, which is located just below the April high (1.4298).
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The pair USD/CAD Rate is the Daily Chart
Source: The Negotiation Of The View
- Keep in mind, the short-term rally of the pair USD/CAD saw the light of day due to the failure of the attempt to break/close belowthe Fibonacci overlap around 1.2950 (78.6% expansion) to 1.2980 (61.8% retracement), with the the performance the opening area highlighting a dynamics similar as the exchange rate the failureed to test the 2019 low (1.2952) during the first full week or in January.
- The movement of the USD/CAD problem can persist, by 2020, such as the exchange rate breaks out of this price range, the action starting in the fourth quarter, or 2019 at the latest, and clear the October high (1.3383).
- However, the recent price action warns, or range-bound conditions that the a break of the descending channel formation, failed to produce a test of the April high (1.4298), with the recent decline in USD/CAD, the spraying of the April low (1.3850).
- In turn, the USD/CAD seems to be on track to test the monthly high (1.4173) as he carves a new series of higher highs and lows, with a break/close above the Fibonacci overlap around 1.4130 (100%) for 1.4140 (161.8% expansion) bringing the 1.4260 (23.6% retracement) area on the radar, which is located just below the April high (1.4298).
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— Written by David Song, Currency Strategist
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