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CAD is giving way on the upcoming Canadian election
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USD / CAD with a new peak for the day.
Technically, things look unfavorable to the Canadian dollar. At the moment we have a strong bullish movement due to the upcoming political uncertainty in Canada and the weakening oil. We expect an initial move to the area at 1.32241. Given the strength of the level, we will expect corrective movement back to the zone at 1.31441, which will form a new bullish movement upwards to the main attack zone at 200 moving average zone and the 50 Fibonacci area.
Alternatively, with a price rebound of 38.2 Fibo, with the base improving around the Canadian dollar and oil, the price could potentially break the zone at 23.6 Fibo and accelerate sales to 1.30180 zone. The 50 average will also play a key role as a dynamic resistance in upward movements.
Fundamentally, the political situation in Canada and weaker oil have today plunged the Canadian dollar. Canadians will head to the newsletters on October 21st. The Prime Minister, Trudeau, today announced a date that didn't surprise analysts so much. The Canadian government is making strict political commentary, with elections sooner or later announced in the fall.
As a consequence, political risks in the country rise over the next 40 days. The maneuvers of political promises and promises begin, exacerbating uncertainty. The party currently run by the government - the Liberal Party - is likely to win, but is expected to be by a small majority. In this case, they are at risk of being in the minority, and they will have to rely on the NDP to form a government. It is quite possible that the opposition in the face of the Conservatives may win the majority, or at least win significant positions. Canadians are not so involved in local politics until the very election.
What does all this mean for the Canadian dollar? The Liberal majority, if won, will have more bearish influence on the national currency, while if the Conservatives win, it will be positive for the Canadian dollar. However, the NDP minority with the NDP will have a serious negative impact on the currency.
Trader Martin Nikolov Read more:
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