The Canadian dollar dropped sharply on Monday after US Trade Representative Robert Lighthiser said the time for agreement is on the way, and Canada and Mexico have not shown their intention to change the deal. Against this background and partly due to slower oil growth, the Canadian lost 3.1% from the beginning of the year. And, according to a large number of market participants, the bad for CAD is yet to come.
Despite terse US holdings, Trump believes it makes sense to exclude Canada and Mexico from the additional industrial metal levy he plans to introduce later this year. "I think this is a good enough incentive for countries to conclude a new NAFTA deal," Trump said. On the other hand, Mexico and Canada have announced they can very quickly prepare retaliatory measures if Trump takes sole action on NAFTA.
What we need to take into account is that neither Mexico nor Canada are in good economic condition to contradict the United States. Mexico will face elections in a few months, and Canada's economy is still lagging behind leading world leaders.
Technical USD / CAD managed to break the long-term consolidation that began in July 2017. The mid-term movement remains a longevity, and given the strong dollar and impending changes in NAFTA and US import duties, the momentum is getting stronger. Following a statement from the US sales representative, the couple managed to cross the levels of horizontal resistance and broke a 50% Fibonacci correction on the downward trend - the beginning of a new upward trend. Price above SMA 200/50 - positive signal. To minimize risk, we can look for better positioning around the 1.2930.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Derivatives and margin trading involve a high degree risk level. You should not trade Forex and CFD unless you fully understand how it functions, what your benefits can be, what your risk is, and what you may lose. Please, note that the losses can be practically unlimited and that the initial deposit will not permanently limit the risk. You have to fully realize your financial status and make sure that trading in derivatives hides the risk of losing the entire amount invested. Invest only the amounts that you are able to lose.