USD/CAD PRICE OUTLOOK: US DOLLAR EYES SUPPORT AS ELECTION UNCERTAINTY LINGERSUSD/CAD bulls defended the 1.3100-price stage in a s
USD/CAD PRICE OUTLOOK: US DOLLAR EYES SUPPORT AS ELECTION UNCERTAINTY LINGERS
- USD/CAD bulls defended the 1.3100-price stage in a single day because the US Greenback makes an attempt to agency
- US Greenback volatility may endure with potential for a contested election nonetheless looming giant
- USD/CAD worth motion may spike greater if Trump wins key battleground states MI, PA
US Greenback weak spot was a evident theme all through Tuesday’s buying and selling session as markets positioned for a blue-wave on election night time. USD worth motion gravitated decrease seeing {that a} Democratic sweep would possible result in the passage of a large fiscal stimulus bundle within the close to future, and a Biden presidency would possible be comparatively friendlier on commerce coverage with Canada.
In distinction to a Biden shoe-in hinted at by political polls, nevertheless, actuality has been fairly the nail-bitter. Betting odds for a Trump victory ping-ponged all through election night time and into Wednesday morning, which corresponded with aggressive repricing of US Greenback weak spot. For instance, USD/CAD worth motion was buying and selling across the 1.3100-handle till information crossed the wires that Trump would win Ohio and Florida, two states traditionally wanted for a GOP presidency, which sparked a 200-pip surge by the US Greenback towards the Loonie.
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Buying and selling Foreign exchange Information: The Technique
USD/CAD PRICE CHART: DAILY TIME FRAME (18 JUN TO 04 NOV 2020)
As Wednesday’s buying and selling session progressed, betting odds flipped again in favor of a Biden victory as he turned Arizona whereas Trump’s lead in Michigan and Wisconsin thinned. This ship USD/CAD snapping again to intraday lows. Present numbers have Joe Biden with 238 electoral school votes and Donald Trump with 213. That mentioned, it seems just like the election will come right down to the outcomes of Michigan and Pennsylvania.
| Change in | Longs | Shorts | OI |
| Day by day | -8% | -33% | -16% |
| Weekly | 5% | -54% | -20% |
USD/CAD worth motion may stay below strain as mail-in ballots are tallied and probably assist shore up odds that Biden will steal the White Home. Nice uncertainty relating to the ultimate election end result nonetheless stays, nevertheless, and is a theme prone to proceed fueling US Greenback volatility. Prospects for a contested election can’t be completely discounted but both.
If this risk good points traction, or if proof crosses the wires pointing to a Trump re-election, the US Greenback may stage a face-ripping reversal greater off technical help offered by the 1.3100-price stage and its bullish pattern prolonged from the 31 August and 19 October lows.
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Foreign exchange for Novices
A transfer to the upside by USD/CAD costs may face pushback close to the negatively-sloped 100-day easy shifting common, however eclipsing this stage might open up the door to a different have a look at month-to-date swing highs. Alternatively, breaching the world of buoyancy round 1.3100 may tee up a pointy extension decrease towards the 1.3000-mark.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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