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Trade Desk Thoughts
Cad and Oil- The Mystic Is Still There
As an economic region Canada has an integral role to play in supporting, and benefiting from, U.S. economic expansion, with Canada now seen to be expanding its manufactured goods, and raw commodities further afield. It seems as though, in the new era of global trade, post credit-crisis, that the Canadian dollar may just make the move once again to parity.
In Wednesday trade the market saw Canadian Housing starts increase from 134,200 units in July to 150,400 units in August, as reported by the Canada Mortgage and Housing Corporation. This release should continue to drive the Canadian dollar higher against U.S. dollar in the coming session. One of the leading indicators for USD/CAD pair is oil, which is making new highs, with around 1% already added in trade on Wednesday to the previous session’s 5% rampage.
Technically, USD/CAD seemed to be in a corrective pull-back mode during the Asian session when prices rose from the 1.0672 low to test bids around 1.0833 resistances, that were hit in the middle of European session.
After the 08:15 EDT Housing report, the USD/CAD slid for around 70 pips, while oil moved to new daily high, and at the same time the U.S. dollar index fell to new lows, influenced by a higher equity market.
“It is not the question if anymore, but just when the cad will break through the 1.0630 lows from August”, said TheLFB Elliott Wave team. “ When compared to the oil and USD/CAD wave counts, the Canadian dollar may easily make a move down to the 1.0480 support area, while oil is approaching $74.90 per barrel” they added.
To review the latest LFB charts please visit the public Chart of the Day area.
Oil chart of the day link : https://www.thelfb-forex.com/fullStoryView.aspx?sid=5477
Cad chart of the day link: https://www.thelfb-forex.com/fullStoryView.aspx?sid=5478