USD/CAD: The loonie is under a double interdict

Global markets prefer the US currency in any risk aversion scenario and the resource based Northern economy is facing a prolonged slump in commodity pricing and usage, FXStreet’s analyst Joseph Trevisani reports.

Key quotes

“Neither is amenable to the monetary policy remedies supplied by the BoC and at one remove by the US Federal Reserve. Their policies may ease the downturn and in the Fed’s case prevent financial system risk and contagion but they cannot create the demand necessary to lift the North American economies from their pending recessions.”

“Until at least one of the Canadian dollar’s disabilities, risk or energy demand, is removed its American cousin retains all the advantages.”  

“The relative calm of this week, WTI excepted, compared to the last month has given the relative strength index a mild positive indication but without conclusive trading signals.” 

“Likewise the three moving averages point higher with the cross of the 21-day on Monday with higher closes on Thursday and Friday pointing to USD/CAD gains next week.”