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USDCAD: Reversal of uptrend

Statistics Canada today reported the Current account of Canada which is the difference in value between imported and exported goods, services, investment income and current transfers during the previous quarter. It is directly linked to currency demand and a rising surplus indicated that foreigners are buying more of the domestic currency to execute transactions in the country. Above graph shows the consolidation of the pair before the release of the report.

According to the report the Canada’s current account deficit on a seasonally adjusted basis increased $1.2 billion to $16.0 billion in the fourth quarter. This increase came from the larger deficit on trade in goods. Deficit on international trade in goods widened $1.4 billion to $2.7 billion in the fourth quarter as exports fell and imports moved higher. Economists were expecting the deficit to widen to 16.5 B. Above graph shows that the pair broke out from the support trend line and reversed the uptrend.The pair might continue to fall further.