Loonie Grinding Lower
Today’s Spotlight Market
The Canadian economy is officially in recession, after experiencing negative GDP growth for the first two quarters of 2015. The Canadian Dollar has been falling for most of 2015, and the surprise rate cut in January only accelerated the downward trend. An upcoming general election could make for some volatile trading days ahead for the Canadian Dollar.
Fundamentals
Persistent downward pressure in Crude Oil has continued to exert downward pressure on the Canadian Dollar. Canadian GDP came in at -.08% for the first quarter of 2015 and -.05% for the second quarter. The oil rich provinces of western Canada are seeing higher unemployment as the energy industry sheds jobs. Still, there are some positive signs ahead for the Canadian economy. The GDP for June came in at a positive 0.5%. Housing prices in Toronto and Vancouver continue to climb. Canadian voters will be going to the polls on October 19th. There is currently a very tight three-party race, and economic news could very well determine if voters return the Conservative party to power or if they elect the Liberals or New Democratic Party candidates.
Technical Notes – View Today’s Chart
Turning to the 3-month continuation chart, we see a general pattern of lower lows and lower highs over the past 3 months. The Canadian Dollar is far below the 50-day Simple Moving Average (SMA), while the 20-day SMA is providing a strong resistance line. Many of the recent candlesticks show a fairly wide daily trading range but a final close near the day?s open. 14 day RSI is a neutral 55.52.
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