Daily Market Insights

 
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26/4/2017
USD/CAD

Canadian Dollar gains strength

The US President Trump's Director of the Office of Management and Budget (OMB) Mick Mulvaney mentioned that Trump hasn't agreed to include Obamacare subsidies in Spending Bill. Canada is planning to launch a universal basic income scheme wherein the government announced plans to give free money to 4000 eligible Canadian households through a three-year study on this project.

The three-year study will likely include single persons to receive up to $17,000, minus half of their income. Also, couples might receive up to $24,000 whereas the physically disabled might receive up to $6,000.

Ontario Premier Kathleen Wynne commented on the free money housing scheme and stated that "It's not an extravagant sum by any means. But our goal is clear. We want to find out whether a basic income makes a positive difference in people’s lives. People are anxious about their jobs; they're anxious about their futures. They're worried about the soaring costs of renting or buying a place to live. We have chosen these communities intentionally because they are the right size and they have the right mix of population."

The USD/CAD pair is once again near the potential resistance levels at 1.3601 with the pair looking for a corrective wave retracement formation. The USD/CAD which has been rejected in the past at this level indicates that the pair is in for some decline with the stochastic at 50.0 level zones. At the moment, the price has moved within the key resistance level where the pair has been tested many times and proves to be a strong area to breach.

We expect the price to reverse with the fractal resistance at current levels. This forms a downtrend and confirms that the pair will make a pullback before making any further movement. Though the 100SMA and 50EMA are well above the current levels, the pair may see some strong resistance in the upward bias and shall make some drop down. Before any further movement, we will look for the pair to reach 1.3530 levels.

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