The USDCAD pair moved higher on Wednesday and was trading 0.20% stronger during the London session, hovering above 1.33, which is close to one year highs reached last Friday.
The Loonie slipped this week as the Canadian government announced new measures to prevent a potential flood of steel imports from global producers seeking to avoid U.S. tariffs. The measures are said to be a combination of quotas and tariffs aimed at certain countries including China. The same steps were already announced by the European Union.
It appears the trade war between China and US is spreading to a world-wide trade war, which could have a rather negative impact on the world economy.
Later in the day, the US durable good orders are projected to tick higher from -1.6% to -0.9%, but core durable goods will most likely slow by half from 0.9% to 0.5%, which could be negative for the greenback.
The pair has been trading in a narrow range, which looks like a consolidation period before breaking higher. The resistance is therefore seen at 1.3330 and if broken, further rise to Friday’s highs of 1.3380 or further higher could occur.
On the downside, the support is seen at 1.3260 and if not held, the immediate bullish trend would be cancelled with a possible drift lower to 1.32. In all cases we strongly recommend to have rigorous money and risk management.
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