Today, on November 5th, the US Dollar is going further up against the Canadian Dollar. The rally is going on even after the price reached a new 5-year high yesterday amid lower oil prices coupled with the comments made by the Governor of the National Bank of Canada. They gave everyone to understand that the pace of interest rate hikes in Canada will be lagging behind those that will be seen in the USA and implemented by the Fed.
In the middle of yesterday’s American trading session, the USDCAD exchange rate reached a new major high at 1.1429. This is the highest level since July 2009. The Canadian Dollar faced bearish pressure coming from declining crude oil prices, which dropped to multiyear lows after Saudi Arabia’s unexpected decisions. In particular, on Monday, the country lowered oil prices for the USA, which instantly made the markets worried about the future fate of oil prices.
Lower oil prices will affect Canada, which is a major oil exporter. As a result, the National Bank of Canada lowered its economic growth projections for 2015 almost by 0,25%.
Yesterday, on November 4th, the Canadian Dollar got a slight break after stronger-than-expected external trade figures. The external trade unexpectedly turned positive, with a surplus of 710 million CAD amid the recovering export of autos and trucks to the USA coupled with the strongest decline in the energy export in almost 6 years. These data were released by Statistics Canada, Canada's national statistical agency.
Still, the retracement may be considered by traders and investors as a chance to add to their bullish positions. Meanwhile, the markets are getting ready for interest rate hikes in Q2 2015 while the National Bank of Canada is probably going to follow the same strategy 2 quarters later. With that said, the USDCAD exchange rate is more likely to go up in mid-term prospects.
According to Masterforex-V Academy, one of the most outstanding experts in contemporary financial markets, the hourly chart of the currency pair is currently indicating a mid-term downtrend, which matches the long-term one. The wave count is currently witnessing another move up started from 1.1120. At this point, the price has set another 5-year high at 1.1455 and is still trading close to it. Both technically and fundamentally, the bullish scenario still looks more probable.
