Canadian dollar appreciate on Trudeau election victory

Posted by Lulama Msungwa -
Scope Markets

Table of Content

Keynotes:

  • Trudeau wins Federal election
  • Canadian dollar advance against a basket of G10 currencies
  • Gold price eye the Wednesday FOMC
  • Technical outlook

The Canadian dollar appreciated.

His Liberal Party is expected to have a third minority term. The The Canadian dollar rose against the U.S. dollar in Asian trading on Tuesday, partly because the Trudeau Liberal Party’s expected victory in the general election assures investors that economic support will continue.

The commodity-linked currency also got a boost from the rising price on the commodity market with the crude oil currently rallying higher after yesterday sell-off associated with the

The market continues to speculate about the solution between complete collapse or the Chinese government bailout. For markets that are worried about contagion, the extent of management collapse will be a focus. The coupon payment for Evergrande’s bonds will mature on Thursday.

commodity currencies receive the result of the election showed that the current Prime Minister Justin Trudeau had won, d some support, as risk-sensitive assets took a breather from yesterday’s carnage. Crude oil rose slightly, helping the Canadian dollar offset the previous day’s decline, and the election results also increased the increase.

Technical outlook of Canadian dollar vs Japanese Jen

The CADJPY sell-off yesterday threatened to break below the support level of 84.96 and the zone proved to be stronger as the market formed a rejection to make up some gains. As the mood shifted and energy prices recovery, the Canadian dollar quickly recovered, but we returned to a downturn. This is not only related to today’s Canadian elections but also related to general risk sentiment and global growth concerns. Oil prices are also hovering around $70,  compared to the delta lows of $62. If the CADJPY manage to break above 85.97 we could see further gains.

CADJPY, Sep 21, 2021 made by LulamaFX from Scope Markets

Gold price

Wednesday’s FOMC meeting will bring the gold market under control, as traders will contact Fed Chairman Jerome Powell to let them know more clearly when the central bank will cut its $120 billion monthly bond purchase program. The U.S. dollar has accepted the offer in the past few weeks because Chairman Powell is expected to provide at least some hints of interest rate cuts, but since this appears to be fully priced, any restrictive disappointment may cause the U.S. dollar to sell off and push up the price of gold. However, any upward movement may be short-lived, as the contraction is a question of when not whether the dollar will rise in the coming months.

Technical outlook of Gold

Gold fell to the $1,758 area during the reversal and has now entered the positive area for the third consecutive day. The U.S. dollar continued its highest level of retracement since August 23 on the previous trading day and maintained its defensive momentum in the first half of Tuesday’s trading session. In turn, this is seen as a key factor to moderately boost dollar-denominated commodities, including gold. However, a combination of factors inhibits any significant upward trend, and some caution is required before preparing for any further appreciation trend.

A further move to the upside could see the price look to test the level of $1832. The opposite can happen if the breaks support level as the price can drop the lows of March 2021.

Gold price/movements, Sep 21, 2021 made by LulamaFX from ScopeMarkets

LULAMA MSUNGWA

Research & Markets Analyst

Scope Markets

Share this article:

Disclaimer: This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regardsto past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.

Payment Methods

Scope Markets
Scope Markets
Scope Markets
Scope Markets

Awards

Scope Markets
Scope Markets
Scope Markets
Scope Markets

Scope Markets offers institutional and retail trading services to businesses and traders worldwide. Our top management team has more than 20 years of experience in the industry, and we are proud of the solid partnerships we built over the years. Whether it's a business or individual, Scope Markets has a wide range of trading solutions that are compliant, flexible, cost-efficient, innovative, and place the client first.

Contact Us

Registered address:
6160, Park Avenue, Buttonwood Bay, Lower Flat Office Space Front, Belize City, Belize

Email:
customerservice@scopemarkets.com

Tel:
+44 2030 516959

Risk Warning

Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors. Trading in financial instruments may result in losses as well as profits and your losses can be greater than your initial invested capital. Before undertaking any such transactions, you should ensure that you fully understand the risks involved and seek independent advice if necessary. Please read and ensure you fully understand our Risk Disclosure.

Legal Information

RS Global Ltd is authorized and regulated by the Financial Services Commission of Belize ("FSC") under the Securities Industry Act 2021 with registration number 000274/2.

Restricted Regions

Scope Markets does not offer its services to the residents of certain jurisdictions. Please read carefully our Restricted Countries document.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

© Copyright 2022 Scope Markets. All Rights Reserved.