- January 9, 2019
- Posted by: Joey Benedid
- Category: Market News
The reversal of moves in all asset classes that occurred in December continues with participants believing 2019 looks rosy and a Sino/American trade agreement is imminent. This is hardly the case but negative exuberance has been replaced with positive exuberance as market participants appear to have the insight and restraint level of a teenager. A trade agreement between China & the U.S. will take months, if not years, to properly negotiate while global economic concerns with Brexit, Italy and FED interest rate policy are but a few of the economic complexities that are very much in play at the moment.
USD/CAD is very much a part of this reversal of fortune so far in 2019 as CAD strength has continued overnight bolstered by oil’s rise above $50 in overseas action. Today’s Bank of Canada meeting will result in no interest rate change while all focus will be on the accompanying Monetary Policy Statement and news conference following the release. While it is expected hat the Governor will lay out his case for a dovish outlook, the tone will be keenly eyed for further cooling of rate hikes down the road. A breach of the 50% Fibonacci retracement support level at 1.3224 opens the door to 1.3150 while a move above 1.3280 will see us trade towards 1.3346.