The USD/CAD price held steady in early trading as investors focused on today’s Canadian election. The pair rose to 1.2796, which was the highest level since August 23rd.
Canada election
The USD/CAD price is rising as traders wait for the results of Canada’s flash election that pits conservatives against conservatives and liberals. The presidency pits Justin Trudeau, the incumbent and the conservative’s Erin O’Toole.
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Going into the election, polls say that the conservative has a 32% lead compared to 31% of the liberals. This will be a setback for Trudeau, who hoped to use the flash election to gain more parliamentary sets.
O’Toole has benefited from a resurgent separatist party in Quebec and Trudeau’s waning popularity having stayed 6 years in power. Therefore, the results of the election will have an impact on the USD/CAD pair.
The pair is also rising because of the relatively strong US dollar as investors worry about Evergrande contagion risks. The company’s shares declined by more than 15% in Hong Kong as investors question whether the firm will be able to pay its obligations. A collapse of the firm could have contagion risks around the world.
Meanwhile, the USDCAD is also rising as investors wait for the outcome of the Federal Reserve meeting that will start this week. The bank is expected to leave interest rates unchanged between 0% and 0.25% and maintain its quantitative easing (QE) policy unchanged. Still, it will likely provide more information on when it will start to taper its asset purchases.
The performance of crude oil has also pushed prices higher. Brent, the global benchmark has declined by 0.73% to $74.79 while West Texas Intermediate (WTI) has fallen to $71.20. Oil prices are important for the pair because of the amount of oil that Canada exports every day.
USD/CAD technical analysis
The daily chart shows that the pair has been in a bullish trend in the past few weeks. It has risen by more than 6.75% from its lowest level this year. Along the way, the pair has jumped above the 25-day and 50-day exponential moving averages (EMA).
It has also remained slightly above the lower side of the ascending channel. Therefore, there is a possibility that the pair will keep rising as bulls target the upper side of the channel at 1.3000.
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