Positive Figures from North America Send USD/CAD Tumbling

Posted Friday, March 23, 2018 by
Skerdian Meta • 1 min read

The Canadian Dollar has been taking hits one after the other in recent weeks. Trump’s tariffs on steel and aluminium and some negative Canadian economic data sent USD/CAD above 1.31 on Monday.

The USD entered another bearish phase this week as the Fed sounded less hawkish than the market was expecting. This caused the USD/CAD to return back down from Monday’s high. The recent inflation report from Canada gave this pair another push lower.

Monthly CPI (consumer price index) was expected at 0.4% but the actual reading came at 0.6%. The yearly CPI number also came better than expected at 2.1% versus 1.9% expected.

The numbers from the US were positive too. Durable goods orders jumped 1.6% higher. Although, it still was not enough to prop up USD/CAD. Consequently, this forex pair lost more than 100 pips after making a retracement higher in the last couple of sessions.

USD/CAD now trading between two moving averages

As you can see, buyers tried to break above the 100 SMA (green). They gave it a few tries but failed to move above. Today, fundamentals took control of the situation and down we went.

The support at 1.28 is still in place. Now the 100 SMA (red) has caught up with price and will likely strengthen the support area. Therefore, there is a trade opportunity here. I might open a short term buy signal near the red moving average with a tight stop below targeting a move of 30-40 pips.

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