- USD/CAD refrains from further advances amid doubts over the US-China trade deal.
- China’s Foreign Ministry’s comments concerning the US bill on Hong Kong triggered fresh risk-off.
- Canadian CPI, US Retail Sales, and Fedspeak to act as additional catalysts.
With the latest challenges to the US-China trade deal, USD/CAD stops earlier recovery while trading around 1.3200 amid the initial trading session on Wednesday.
The Loonie pair earlier benefited from increasing odds of a trade deal between the United States (US) and China after the dragon nation showed readiness to import more of the US Agricultural products and said that both the nations are on the same page for the deal.
The recent risk-off momentum could mainly be ascertained to the US House bill that requires an annual inspection of Hong Kong in order to safeguard its sovereignty from Beijing intervention. The bill known as the Hong Kong Human Rights and Democracy Act passed the House during late-Tuesday in the US but is still left for crossing the Senate.
Ever since the news of the bill crossed wires, China’s Foreign Ministry started flashing threats of retaliation and warned the US to stay away from internal issues.
The same increases the odds of another failed talk between the two superpowers at the time when the final trade deal is yet to be signed and the US has its own set of high demands comprising currency regulation and Intellectual Property Rights (IPR) regulations.
Although, trade headlines will be the key driver, investors will also keep an eye over the economic calendar that offers Canada’s Consumer Price Index (CPI) data for September, coupled with the US Retail Sales for the same month and comments from Federal Reserve Bank of Chicago President Charles Evans and Federal Reserve Governor Lael Brainard.
Technical Analysis
While an upward sloping trend-line since July-end, at 1.3160 now, limits pair’s near-term declines, 200-day Exponential Moving Average (EMA) level of 1.3250 seems a tough resistance for buyers to cross.
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