CAD Currency Pair 2016
Canadian dollar: Weakening continues in 2016
The fall in oil prices reduced the GDP of Canada by 1.25 percentage points in H1 of 2015. The fall in the level of investment will put pressure on economic growth.
The Canadian economy will face the long period of adaptation to low oil prices. Moreover, the situation on the labor market gets worse: the underutilized labor force is going to increase. That’s why the forecast for the achievement of full employment was delayed to mid 2017.
There are also some positive moments. The weakening of the Canadian dollar will have a positive impact on the non-export sector of the Canadian economy. Core inflation will remain at 2% until 2017.
The development of the correction decline to the previous growth continues for USD / CAD currency pair 2016. Technically, according to the overall upward trend, the rebound from this level can become the trigger for a resumption of price growth with the prospect of its return to maximum. A breakthrough of the level of 1.3650 also can be considered as a signal for the upward movement. If the level of 1.34 will not be able to fulfill its role, the downtrend will be developed further.
The tendency may remain until the end of 2016 which give the signal to continue growth in the area of horizontal resistance levels of 1.50 and 1.5360. The fundamental reason for such expectations is the difference in the ongoing monetary policy of the Fed and the Bank of Canada.
The December meeting of the Federal Open Market Committee with the Fed decided to raise the interest rate to 0.5%. Managers noted the possibility of new steps to tighten monetary policy in case of positive inflation trend with the potential achievement of 2% level. At the same time, the economic situation in Canada does not allow analysts to say with confidence that the period of necessary use of soft policy is over.
The EUR / CAD currency pair 2016 hits a new high at the beginning of this year. But, unfortunately, the upward trend had stalled. Quotations returned below the highs of previous years passing near 1.5570 as a result of the weakness of the buyers. This may the further decline of the pair become real, so EUR / CAD currency pair 2016 achieved local support located at 1.5250.
As you can see, the buyers attempted to continue the growth. However, the level of 1.5570 was lost and now it is on the side of the vendors. It did not give their success an opportunity to be built on. There was formed a short term consolidation range with the boundaries of 1.5570-1.5250. Technically, the exit from this range can become a trigger for a new movement of prices in the direction of the break.
CHF quotations on the daily chart have reached the horizontal support level, located at 0.7240. The attempts of the buyers to break it were not successful. After these attempts, the quotations returned under the described level, tested it for resistance and fell back down. Technically, the current scenario of events succession can become a trigger for further prices decline within the earlier established range boundaries of 0.7240-0.68.