The Loonie rallied yesterday after the dovish message from the Fed; the USD/CAD managed to fall (strong Loonie) towards the lowest point of this week so far 1.3257. Finance Minister Bill Morneau said yesterday that Canada is not in recession and it is not heading for one. This was in response to some economists who have begun to call for a Canadian recession. Yesterday, Morneau -in less than one day after he released the 2019 Federal Budget- said, “They would be incorrect...that would be technically wrong and certainly not in line with our expectations.” This comment weighted on the Loonie positively yesterday, even before the Fed announcement.
However, renewed tensions between the US and China have come loud this week, where US President Donald Trump said the tariffs his administration set on Chinese exports would stay in place until official confirmation appears from China maintaining its end of the bargain. This is creating some negative pressure on the Loonie this morning.
Technically speaking and looking into today’ session, the USD/CAD failed to keep momentum to the downside (failed to have a stronger Loonie), and it is still trading into its long term up trend, doing “higher lows” and “higher highs”. The resistances levels for today and probably for the rest of the week are 1.3363, 1.3375 and 1.3419, and the support levels are 1.3340, 1.3323 and 1.3307.