The Canadian Dollar fell sharply, triggering a weekly bearish gap on the weekend news of a new NAFTA deal (USMCA). Will the USDCAD continue to move downward?
1 October, OctaFX – The USDCAD pair held on to its heavily offered tone through the early European session, albeit seems to have found some ahead of the 1.2800 handle.
Against the backdrop of Friday’s hawkish comments by the BoC Governor Poloz and upbeat Canadian monthly GDP print, news that the US and Canada have reached a new trade deal to replace NAFTA provided a strong boost to the Canadian Dollar.
Canadian Dollar Falls Sharply
The USDCAD fell sharply after indications that the US had reached a deal with Canada. This ended weeks of tensions between the two countries. The pair reached an intraday low of 1.2810, which was below the important support. This was an extreme low, and is obviously below all the major moving averages.
There is a likelihood that the pair will continue to move downwards as traders expect the BOC to start thinking of a rate hike. This is because the US-Canada trade relationship was a major factor in determining the future of the hikes.
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