Is the USD/CAD about to gain bullish momentum and reconquer 1.3500?

By Admiral Markets

Source: Economic Events May 8, 2019 – Admiral Markets’ Forex Calendar

After the Bank of Canada fully abandoned its bias towards raising interest rates during April 24th’s meeting, the USD/CAD pushed slightly above 1.3500, but didn’t take on any further bullish momentum.

But as long as we trade above 1.3250/80 on a daily time-frame, a sustainable run back above 1.3500, with an initial target around 1.3670 on the upside stays on the table.

This seems particularly true after yesterday’s Ivey PMIs came in better than expected, at 55.9 for April from 54.3 last March. And the weak reaction in the CAD helped with the push towards 1.3500 in USD/CAD.

In our opinion, this is a sign of another attempt to sustainably break above 1.3500 in the coming days, because if a solid dataset can’t result in a positive reaction for the CAD, it underpins the fact that market participants give the neutral/dovish rhetoric of the BoC last month a lot of credit, probably even a little more now, after Trumps announcement of new tariffs on Chinese products from next Friday onwards:

Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD Daily chart (between February 7, 2018 to May 7, 2019). Accessed: May 7, 2019, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the USD/CAD increased by 9.4%, in 2015, it increased by 19.1%, in 2016, it fell by 2.9%, in 2017, it fell by 6.4%, in 2018, it increased by 8.4%, meaning that after five years, it was up by 28.4%.

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Source: Is the USD/CAD about to gain bullish momentum and reconquer 1.3500?

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