Daily Market Analysis by ForexMart

NZD/USD Technical Analysis: January 20, 2017

The Business PMI of New Zealand showed positive results, however, the data for the Building Permits posted negative figures. The commodity currency NZD got some support from the dynamic prices of oil. The recent data of the United States weighed on the kiwi.

The Asian recovery run out of steam subsequent to the 0.7200 level testing. The barrier seems hard to break. The NZD decline after it touched the level in the Asian hours and stayed under the resistance region during the EU session.

As shown in the 4-hour chart, the price remained on top of the moving averages yesterday. Both 100 and 50-EMAs directed an upward trajectory, the 200-EMA is neutral based on the mentioned timeframe. Resistance lies at 0.7200, support is found at 0.7150.

MACD grew less which showed some weakening on the buyer’s position. RSI headed northbound after it left the neutral territory.

Failure to reacquire 0.7200 will send the market some reversal. A steep breakout under 0.7150 could initiate an easing through 0.7100.

GBP/USD Technical Analysis: January 20, 2017

The Housing Price Balance came in the red for December, the figures presented worse-than-expected outcome which stalled the recovery of the British currency on Thursday. The sterling had a stronger stance yesterday, enabling the GBP/USD to approach its recent highs found in the 1.2400 level. The Cable reversed few of its losses after the softening of the dollar across the board.

The spot met a local bottom at 1.2250, shifted its course and began to rallied up breaking the 1.2300 region amid EU sesion. The pair cross the level and proceeded northwards intended to reach the 1.2400 target.

The buying interest gradually dwindle during the North American trading. The price suffered from a downward rejection and drag lower but it resumed to develop in the middle of 100 and 200-EMAs shown in the 4-hour chart.

The 50 and 100-EMAs is confined in the neutral area while the 200-EMA keep on ployed lower. Resistance arrived at 1.2400 level, support lies at 1.2300.

The MACD ascended which post a buy signal. RSI dropped the neutral zone, en route overvalued zone.

The pound is still under the possible risk of a deeper fall. The GBP had a limited movement due to the 1.2400 hurdle and 200-EMA. As the spot dip below the 1.2300 support region, a downtrend will initiate immediately. We do not eliminate the probable easing within 1.2200. The price will touch 1.2450 if the break occurred on top of the 1.2400 handle .

EUR/USD Technical Analysis: January 20, 2017

The ECB decided to keep its rate unchanged as the deposit rate maintained -0.4% and 0.0% for the interest. Meanwhile, the greenbacks stabilized on the back of the positive data in the US considering the Initial Claims for the number of jobless individuals is in the green and Housing Starts presented some solid figures. Investors are focused on the inauguration on Trump scheduled on Friday.

The downward momentum failed to hold 1.0650 as the sellers found a strong hurdle that pushed the pair upwards.

The single European currency was able to regain most of its losses that took place on Thursday. The price drove the 1.0650 level before the onset of EU session and continued to lead through 1.0700 region. On the other hand, the upward impetus lived shortly and the recovery slowed down on top of 1.0650. The pair were pulled lower by the renewed selling interest.

Moreover, the price broke 1.0650 and test the mark 1.0600 during the outset of American trades.

The EUR/USD showed a neutral-to-bullish position amid European hours. According to the 4-hour chart, the spot hovered above the moving averages. The 100-EMA cross above the 200-EMA. The 100 and 50-EMAs accelerated while the 200-day moving average is flat as shown in the same chart.

Resistance touched 1.0700 handle, support entered 1.0650 mark. The MACD indicator weakened along with the soft position of the buyers. RSI pierced through the neutral zone.

The pair appeared to bearish. In case a break occurred below 1.06550, a negative indication would rise and signaled for further risk easing of the EURUSD approaching 1.0600, ahead of the 1.0550 region.

USD/JPY Technical Analysis: January 23, 2017


Subsequent to the speech made by Janet Yellen, the US dollar abated. But the greens reversed few of its losses on Friday on the back of the inauguration speech of Donald Trump.

The greenbacks attempted to reach 115.00 barrier amid Asian hours. The bulls pushed the level prior to the onset of the EU trading. The price was unable to maintain its upward impetus and turn back through 115.00 eventually.

The 4-hour chart indicates that the price rebounded to the 50-EMA during the Asian session and it further moved between the 50 and 100-EMAs in the Euro hours. The 100 and 50-EMAs employ a downward trend while 200-EMA was confined in the flat lining. Resistance touched the 116.00 level, support hit 115.00 area.

The MACD histogram arrived in the positive zone and if it hovered on its position, the buyers will strengthened. RSI stayed around the overvalued territory.

The general outlook for the pair remained to be bullish as it rack up through the resistance region 116.00.

The USD/JPY could fail and return to the downside in case the 115.00 handle were unable to support the bullish investors.

EUR/USD Fundamental Analysis: January 23, 2017

The EUR/USD increased for the past few days following the sluggish stance of the greenbacks. The single European dollar benefited from the position of the greens as it climbs to 1.0700 and further extended its gains. The USD weakened with no definite reason as others deemed for the general correction while some claimed it’s all because of the skepticism for Trump’s administration. However, the American currency is clearly at a disadvantage point against the euro.

The EUR is relatively buoyant for the previous week, much more when its U.S peer manifested some strength. The euro continued to bounce back from a limited correction and eventually broke the 1.0700 level, en route 1.0840 region.

There are some issues that the weakness are caused by the speech of Trump coupled with the curtailment for the rest of Obamacare. Moreover, there exist a general risk about the US President’s team and their plans and these uncertainties weighed on the USD.

As the last week of January enters, the economic news is lessened while the upcoming is a beginning for the USD towards an unidentified state which brings higher volatility.

The US and Euroregion do not have major reports to be released for today, what we expect is the continuous fall of the greens.

GBP/USD Fundamental Analysis: January 23, 2017

The GBP/USD maintain a stronger stance in trading as the dollar softened. Meanwhile, the pair seems ready to gain further throughout the day. Even though the pound declined below 1.2000 due to concerns about the Brexit movement, it remained steady for the previous week. Moreover, British PM May presented some guidelines and asserted that the nation is set for the hard Brexit, this confirmation lessened the risks and disorientation regarding the referendum which also helped the GBP to edged higher and traded strongly for this morning.

The United Kingdom is currently facing a crucial week as the Supreme Court of the country is expected to make an approved decision in relation to the European membership. Considering the fact that the court will require the government to obtain an approval from the Parliament appealing for Article 50 could initiate the process of withdrawing the UK from the EU. In case it was certified, we expect some volatility against the sterling. Nevertheless, there is a possible delay due to some criticism and arguments that are more likely to arise.

The sequential events with regards to the ruling and dollar weakening are able to lead the Cable towards 1.2500 by which the pair are going to aim for the marks 1.2700-2800.

As for this day, there’s no major news from the US and UK thus the greens instability presumably would dominate for the GBPUSD.

EUR/USD Technical Analysis: January 23, 2017

The EUR/USD pair moved in a bullish tone and stained within the close-term ascending channel on Friday’s trading session. It attained its boundary level over the whole night and rebounded during the early European trades. By the middle of European trading session, the price of spot trading ranges between 1.0700 level and 1.0650 level.

The Resistance level comes in at 1.0700 level while the support level sited at 1.0650 level. Its Moving Averages surpassed its levels for both 50-EMA and 100-EMA moving in a downward direction while the test of 200-EMA moves upward. Its MACD declines implying the weakening of buyers. On the other hand, the RSI entered the neutral territory indicating chances or the price to go lower.

The pair broke higher than the 1.0719 resistance maintaining the uptrend from 1.0340 level. This is anticipated to further go up towards the next target at 1.0800 level. Conversely, a break lower than the 1.0650 level could mean another decline. Hence, if the price closes lower than 1.0600 handle, this could go down towards the 1.0550 mark. The support level is aligned in the upward trend line and a clear break of the price would finish the uptrend. When the current price level is maintained, there is a chance to reach another new high at 1.0720 level but because of the a string lower limit in the upper channel, this could hamper the advancement of the pair.

Euro was not affected by the positive results of Germany Producer Price Index (PPI) as the attention of the market directed on Friday, when Donald Trump was inaugurated as the president of the United States expecting directed hints from the new administration. On the other hand, the traders also wait for the release of Manufacturing PMI of Germany and speech of Draghi on Monday.

January 20, 2017
Positive Year for NZ’s Manufacturing Sector
The assessment for the Business PMI of New Zealand remained unchanged in January which is 54.5. An index of more than 50 would denote a business expansion while a figure below 50 indicates a contracting economy. The PMI provided an advanced outlook pertaining to the economic activities of NZ manufacturing sector.
The positive PMI of the country is caused by the increase in construction, specifically in Auckland which is the region’s major financial centre. The architectural volume is predicted to surge in the near-term since the increase in population coupled with high demand continuously support the sector’s actions. The total production cost of NZ’s gross domestic product (GDP) is close to 12%. This industry positively contributed to the economic growth of Q3 including business services, construction, household consumption and transport. The economy beef up by 1.1% from the month of July until September, based on the report of Wellington’s statistics bureau the previous month.

USD/CAD Fundamental Analysis: January 24, 2017

The USD/CAD pair continues to trade within a tight range and consolidated for the most part of yesterday’s trading sessions. The CAD was recently subject to an increased pressure after the Bank of Canada expressed it plans to implement an interest rate cut in the next few months as a result of the Canadian economy becoming increasingly stagnant after not showing much development in the recent economic readings. This added pressure in the CAD has however helped in offsetting the dollar weakness during the past few days.

The Canadian dollar is probably the only currency which the USD has gained in relation during the past few sessions and has continued to maintain its gains over this currency, while other major currencies have increased in value and has left the dollar behind. The US dollar has been in hot water recently, especially since the market is generally uncertain on Trump’s administration policies and how the newly-minted president plans to run the US economy. The market is constantly kept on its toes as Trump continues to act brash in spite of the initial euphoria during the US elections, where the market had hoped that Trump’s election might be generally be good news for businesses around the world. However, the current administration might have to undergo a lot of work before finally regaining the market’s confidence.

There are no major news releases from both the Canadian and the US economy, and as such, the USD/CAD pair is expected to experience more consolidation and ranging during today’s session. Since the weakness of both currencies are apparently cancelling each other out, the currency pair is unable to make any significant progress and the bulls might have a hard time pushing the currency pair towards 1.3400 points and higher.

GBP/USD Fundamental Analysis: January 24, 2017

Today’s trading session is expected to be very critical for the GBP/USD pair since UK is now awaiting for the release of the country’s SC ruling with regards to its eurozone membership, as well as the Brexit process, which is set to be released during today’s session. The GBP/USD pair has increased in value over the past 24 hours as part of market anticipation, with the currency pair closing yesterday’s session at over 1.2500 points after months of being unable to go over 1.2500 due to repeated pummeling from bears of the said currency. However, since yesterday was a generally good day for the sterling pound, the market is expecting that this currency pair would be able to reach 1.2700 or even 1.2800 in the short-term outlook for the GBP/USD pair.

The UK Supreme Court will be releasing its decision on whether the Article 50 will have to undergo scrutiny from the Parliament or otherwise, since the Article 50 is an essential factor on the carrying out of the Brexit process. The market is generally anticipating that the SC will be approving the Article 50 invocation, and if this does happen, then this will ensure that the whole of the Brexit process will be well-thought of, and this will ensure that equal distribution of ideas instead of the power becoming limited to select people in the government. This is expected to drive up the value of the GBP, but then there are also some risks that the Parliament approval might cause delays in the Brexit process since all views and ideas must be taken into consideration as part of the process.

There are no major news releases from the UK except for the SC ruling for the Brexit process, as well as from the US.

EUR/USD Fundamental Analysis: January 24, 2017

The EUR/USD pair continues to exhibit a strong trading streak as the USD continues to lose its value. The USD has recently been showing weakness and has been consistently dropping in value in spite of initial expectations that the USD will be increasing in value. The market is still unsure on how to approach this recent activity from the USD, although the Fed has already announced that it will be hiking its interest rates at least 2-3 times for the rest of 2017. This particular bit of news should have created an upward support for the US dollar and should be good news for the US economy as well, but then again the Trump administration has just come in, and in terms of fiscal, trade, economic, and particularly foreign policies, the international market is still uncertain on Trump’s stance, and this is why a lot of investors are still somewhat hesitant to invest in the reserve currency.

As a result, the EUR/USD pair is now about to enter a very critical region of 1.0800-1.0840 points and the market will be monitoring the currency pair’s movement within this range, especially if the currency pair will be undergoing a major correction or otherwise.

For today’s trading session, Germany and France will be releasing their respective PMI data, while the UK will be releasing today the SC ruling with regards to the country’s EU membership. This particular bit of news is expected to affect the UK economy as a whole, and will ultimately have an indirect impact on the direction of the euro. As the market is expected to be subject to heightened volatility in the coming days, traders are advised to ensure tight stop losses for their trades.

EUR/USD Technical Analysis: January 24, 2017

The dollar softened on the back of D.Trump’s inaugural speech coupled with the Bundesbank’s report about high inflation. The Deutsche Bundesbank forecasted a 2% inflation for this month, this warning is mentioned on their recent monthly report. Moreover, the outlook is said to develop more than 2% or may even exceed the price stability of the ECB.

As the session opened yesterday, the EURUSD rallied and arrived near the 1.0750 region where resistance is found. While the 100-EMA stayed above the aforesaid level. A break below the candle’s bottom would show a continuous long-term bearish pressure in the market amid Monday trading.

Conversely, a close on top of the 100-EMA would trigger the buyers to make several attempts in approaching through the 1.0850 handle.

The support entered the 1.0640 region close to 10-day MA. Relative Strength Index (RSI) employed an upward trajectory. Likewise, MACD suggests an upward momentum.

AUD/USD Technical Analysis: January 24, 2017

Donald Trump’s program for the economic stimulus lacks clarity which considered to be the reason for the softening of the US dollar. Moreover, the positive sentiment prevailed on the commodities, particularly on Copper by which demand had surged for the Australian dollar on Monday.

The AUDUSD is confined in the short-term ascending channel trading within its recent highs yesterday. The price was able to expand its buying momentum during the morning trades. The AUD pushed the 0.7550 level amid Asian hours and posted its daily high at the mark 0.7575.

The spot decreased eventually and turn back to 0.7500 handle.

As shown in the 1-hour chart, the price lead the 50-EMA downwards and test the 100-EMA, the entire moving averages headed higher. Resistance lies at 0.7600, support sits in the 0.7550 region.

The MACD histogram showed some weakness against the position of the buyers after it decreased. The RSI hovered around the overvalued territory near the neutral zone.

According to the 4-hour chart, technicals signaled an upward expansion. The first bullish target is probably the 0.7600 barrier. If this point were reached, there would be another extension through the 0.7650 mark.

GBP/USD Technical Analysis: January 24, 2017

The British currency was able to gain more strength on the back of the depreciation of dollar. The USD decreased subsequent to the inauguration speech of President Trump which presented unclear implications about his future arrangements.

Meanwhile, the sterling extended its gains on Friday and continued to trade in the green zone yesterday. The GBP/USD escaped from the 7-week descending channel on Friday. The price pushed the 1.2400 level during the Asian session and moved northbound amid the EU trades.

The upward momentum slowed down below the 1.2500 region and a renewed bout of selling interest brought an impact to the spot.

According to the 4-hour chart, the price leads the moving averages (50, 100 and 200 EMAs) upwards and hovered on top of it. The 100 and 50-EMAs resumed its ascending trend while the 200-EMA trail behind. Resistance touched 1.2500 level, the support entered 1.2400 area.

The MACD indicator signalled strength for the buyers as it continually grew. RSI stayed in the overvalued zone and pointed higher.

The Cable appears to be bullish at present. If the pair surpasses 1.2500, the next target will be the mark 1.2550.

AUD/USD Fundamental Analysis: January 24, 2017

The Australian dollar was not that affected by the final decision of the new president, Donald Trump, to draw back from the Trans-Pacific-Partnership on Monday. This could be because the price set into the market soon after the results of the U.S. Presidential election has been released months ago or simply because the investors are neutral and plays indifferent from the outcome.

Other than the TPP deal, Trump has also mentioned imposition of border tax for corporate businesses that becomes a threat to those who moved out of U.S. for production.

Another concern is the remarks of Steven Mnuchin to retaliate the currency manipulation and the strengthening of greenback that may affect the economy negatively. Most especially the short-term trading may be heavily influenced since the value of U.S. dollar is relative to the condition of U.S. economy and confidence of investors in America.

On the other hand, the Australian dollar appreciated in the midst of weaker U.S. dollar. The pair closed at .7583 with an increment of 0.0031 equivalent to 0.40%. This may persist for some to me and boosted for short-term with the current mindset of Trump. Trading activity on Monday demonstrates the goal of Trump to weaken the greenback which would in turn increase the competition in the U.S. market including both good and services. Hence, it can be postulated that a trade war may occur and the same time the traders already anticipate high volatility in the market for this year. This is highly possible for countries to want to go against the greenback.

As for major economic data, the latest quarterly Australian Consumer Inflation are soon to be released with Economists expecting figures of 0.7 percent headline inflation and 0.5 percent core inflation.

January 24, 2017

USD Drops as Trump Begins Pulling Out US from Trade Agreements

The US dollar continued its losing streak after President Trump signed an Executive Order which will pull out US from the Trans-Pacific Partnership. Next in line could possibly be NAFTA, which Trump stated is now undergoing renegotiations in addition to implementing a high-rate border tax in spite of losses incurred after a Fed official stated his preference for high-frequency rate hikes in order to prevent the Fed from lagging behind in terms of economic movement.

January 24, 2017

Bundesbank posts two percent Inflation rate for Germany

Based on the report of Deutsche Bundesbank, inflation is predicted to surge for this month. Earlier in December, the consumer price index rose together with the high energy cost which began 5 years ago. The German inflation marks two percent according to the report of Bundesbank published on Monday. The recent steep increase in the average prices of the oil products caused for the inflation to escalate to two percent for January.

However, the European Central Bank targets with an inflation rate below 2% because it is the most suitable percentage in order for the euro economy to further develop.

On the previous month, the price level of consumer expenditure grew by 1.7% after three and a half years which resulted for high-priced petroleum products. This also made oil companies including the OPEC to imply for production cuts in order to improve the price of the basic material for oil.

On the other hand, analysts predicted for 1.8% inflation in 2021. The German economy continued to improved according to Bundesbank as the country’s industry remained “favorable”. The 2016 GDP expanded to 1.9% after five years and for this year, the bank expects for the same result.

January 24, 2017

Mexico Faces New Probable Risks From New U.S. Policy

Mexico cautions that changes in policies under the new U.S. administration increases risks obstructing production chains between the two countries. This could lead to a drop in exports and direct foreign investments according to the Mexican Central Bank Governor Agustin Carsten.


Although it is not expected to have higher risks for an inflation due to racked up demand curbing the convergence of the headline inflation rate with the Central bank’s target in 2018. At the same time, the easing in fuel prices could have a transient effect to the economy but it could be worse and drastic impact on inflation.

USD/CAD Fundamental Analysis: January 25, 2017

The USD/CAD pair dropped to its trading lows following uncertainties over the trade relations between US and Canada, as well as the increasing oil prices, especially since the oil inventory data is expected to decrease which will automatically translate to the effectiveness of the production cuts, thereby stopping the supply flow and ultimately increasing oil prices, which will then be good news for the Canadian economy.

The Trump administration, unlike the Obama administration, has been creating uncertainties and concerns for the market, especially since most of Trump’s proposed policies are more injurious than beneficial. This has already been seen in the economy after Trump cancelled the Trans-Pacific Partnership and now has his eyes set on the NAFT agreement between US, Canada, and Mexico. If the NAFTA indeed does become cancelled, then this could be disastrous for the Canadian economy and could also adversely affect the US economy. However, the market is still hoping that the attention would be shifted to the trade relations between US and Mexico instead of the US and Canada trade relations. These economic risks, along with surging oil prices, has triggered a decrease in the value of the USD/CAD pair.

The USD/CAD pair is expected to undergo added volatility after the oil inventory data is released during today’s session. The upward movement of the pair is expected to continue today unless the pair manages to cleanly break through 1.3000 points.

GBP/USD Fundamental Analysis: January 25, 2017

The international market has been awaiting with bated breath the results of the Supreme Court ruling of UK’s eurozone membership. The SC eventually ruled that Theresa May and the UK government will have to pursue the approval of the Parliament before Article 50 can be invoked, but then the ruling did not seek for the approval of Ireland, Wales, and Scotland for Article 50. This bit of news was already expected by the market since the SC merely reiterated the previous ruling of the lower court.

While the ruling from the SC was generally good news for the market as well as for the sterling pound, a sell the fact, buy the rumor move was seen in the market yesterday and the GBP/USD pair plummeted through 1.2500 and even hit 1.2420 points after the SC ruling was released into the market. But the currency pair was able to recover from its losses and is now situated just below 1.2550 points, with the GBP/USD pair possibly moving further to 1.2700 and possibly even up to 1.2800 points. While this move might be good news for the sterling pound in the short term, its long term effects could induce additional pressure on the GBP in the medium term.

There are no major economic data scheduled to be released from the UK for today’s session, but the US will be releasing its oil inventory data which could possibly increase the overall risk surrounding the markets as of present. The GBP/USD pair is expected to experience more consolidation for today with bullish undertones.

EUR/USD Fundamental Analysis: January 25, 2017

The EUR/USD pair encountered a hard-pressed resistance region during the previous trading session, with the pair merely consolidating just below this region instead of being able to break past through this barrier. However, the USD was able to get some rest as President Trump chose to keep quiet yesterday and this has caused the dollar to maintain its stance against other major currencies and has also contributed to the consolidating movement of the EUR/USD pair.

Since the market is obviously very jittery and kept on its toes as a lot of players are waiting for President Trump’s next move, this just shows how the market is concerned about the Trump administration’s next move, as majority of traders and investors do not know what to expect from Trump. The international stock market seems to have temporarily put aside the possible risks which come with the movements of the Trump administration, but the USD is now carrying the burden of these uncertainties. This is also the reason why the US dollar is still unable to make a significant leap in spite of the US economy looking generally positive and with the Fed hinting at possibly another interest rate hike in the next few months.

The German IFO business climate data is due to be released during today’s session, with this particular piece of data expected to add up to the generally positive German economy. The oil inventory data from the US will be released today, and any decrease in this particular data should lend upward support for oil prices and increase market-related risks.

NZD/USD Technical Analysis: January 25, 2017
As the Asian session emerged, the bullish momentum appeared to be short-lived yesterday. The price failed to hold its gains and reversed down from the 0.7250 level. Sellers expanded their profits breaking the price through 0.7200 region amid the EU trades. The selling interest was unable to maintain its position upon reaching the region and endured price rejection upwards.
The NZD/USD is confined on top of the moving averages based on the 4-hour chart. The 100 and 50-EMA kept its bullish stance while 200-EMA was flat. Resistance touched 0.7250 mark, support entered 0.7200 handle.
The MACD tool still presented the same position as buyer’s strength continued to grow. The RSI settled close to the oversold readings, confirming another lower trend.
Meanwhile, the 0.7250 barrier is the next bullish target. In case, a return occurred towards 0.7150 there is a probable decline against the 0.7100 support.

January 25, 2017
Slow Economic Growth for South Korea in Fourth Quarter
The Bank of Korea confirmed on Wednesday the economic growth of the sovereign state fell back during the fourth quarter of the previous year. Further sharp decline took place in the construction spending and personal consumption expenditure as the political upheaval intensifies.
The period got affected by the illegal involvement of President Park Geun-hye regarding the corruption scandal. Park got impeached by parliament of South Korea, pronouncing their judgment in a court proceeding. This political instability triggered fears for the probable “policy paralysis” and caused for the Consumer Confidence Index to slump for the third time up to this month.
The growth is approximately 0.4 percent based on Seasonally Adjusted Annual Rate (SAAR), quite from the 0.6 percent result in September and 0.8 percent surge for the month of June.
While the construction investment grew less with a seasonally adjusted 1.7 percent from October to December. On the other hand, the private consumption gained 0.2 percent only and remained lesser by 0.5 percent during the September quarter. Moreover, the annual GDP rate increased by 2.3 percent in the last quarter but comparatively lower from 2.6 percent hike in third quarter.

January 25, 2017
Bank of Japan Done Adding Stimuli under Kuroda—Economists
Economists are stating that Bank of Japan is already done with adding economic stimulus to the Japanese economy under the term of BoJ Governor Haruhiko Kuroda. In addition, economists are also stating that there is a small chance of any adjustments made during the central bank’s policy meeting which is set to end this coming January 31. This is partly due to economic situations overseas becoming more complicated by the minute, especially with the newly-minted Trump administration as well as the hard Brexit process from the UK. The stirring of economic issues abroad has prompted the Bank of Japan to maintain its current policies and wait for these to unravel before finally making a move.

USD/CAD Fundamental Analysis: January 26, 2017

The USD/CAD pair is currently bearing the majority of the downward pressure coming from the dollar weakness which was caused by the Trump administration’s movement. The currency pair has already plummeted by 300 pips during the course of 2-3 days and is now trading dangerously close to 1.3000 points, a very critical region for the pair if the uptick for the USD/CAD continues to occur. The market is now closely monitoring the next move of the Trump administration, especially since President Trump is expected to scrap NAFTA next after recently making alterations to the TPP arrangement as well as to Obamacare.

Although any adjustments made to NAFTA might not have a significant impact on the Canadian economy, this is expected to largely affect the US economy, and could possibly cause global unrest as this could impact trade relations between a lot of countries and the market is expressing concerns on what might happen to other trade agreements as well. The CAD received support from the stability of oil prices which has incurred a bullish undertone. These occurrences have caused the crash of the USD/CAD pair during the past few days, but the market is expecting the USD to regain its strength in the coming sessions which could then help in putting upward pressure on the currency pair.

There are no major economic data coming from Canada today but the US will be releasing its unemployment claims data for today and if this comes out as positive, then this could help in supporting the USD and the USD/CAD pair could be prevented from hitting rock-bottom at 1.3000 points. Traders are advised to closely watch the pair’s movement since any break beyond 1.3000 could possibly be a sign of changing trends in the pair.