Canadian dollar falls as Trudeau loses majority

US futures rose as the earnings season got into top gear. Procter & Gamble reported strong revenue and earnings growth. In the third quarter, the company generated revenue of $17.80 billion. This was higher than the consensus estimates of $17.42 billion. Earnings came in at $1.37, which was higher than the estimated $1.24. Meanwhile, Under Armour stock jumped after the company’s founder, Kevin Plank stepped down. PulteGroup, one of the biggest homebuilders saw both revenue and earnings came above expectations. Meanwhile, Biogen filed for FDA approval of its Alzheimer's disease, causing its stock to jump by 37%. Another company in the news was Stamps.com, which announced its new partnership with UPS.

The Canadian dollar declined slightly against the USD after Justin Trudeau won the election. A report by CBC said that liberals had won 158 seats. This was lower than the previous 184 seats that were secured in 2015. As a result, the prime minister will need to form a coalition government to govern. The country’s parliament has 338 seats. A party that secures 170 seats or more forms a majority government. In recent weeks, Trudeau has been on the defensive. Most importantly, he was forced to apologize after photos of him wearing blackface emerged.

Sterling was calm today as traders continued to have a wait and see attitude on Brexit. Yesterday, speaker John Bercow rejected Boris Johnson’s plan to reintroduce his Brexit bill. Johnson is expected to attempt to reintroduce his bill to parliament later today. In a statement. EU’s Jean-Claude Juncker called the Brexit negotiations a “waste of time and a waste of energy.” He was making a statement at the European parliament. Data crunched by leading news organizations like Guardian and Financial Times show that Johnson has the numbers to pass a deal. Meanwhile, Nick Boles, an opposition MP announced that he had tabled an amendment that will force the government to extend the transition period if there will be no trade deal. He argues that there is a likelihood that the EU and UK are not likely to have a deal by the end of the transition period in 14 months.

EUR/USD

EUR/USD pair eased today and is trading at 1.1136. This is slightly below yesterday’s high of 1.1180. On the hourly chart, the pair appears to be forming a head and shoulders pattern. This is an indication that the pair may continue the downward trend. This has been confirmed by the crossover of the 14-day and 28-day moving averages and the Parabolic SAR. The RSI has also been on a sharp downward trend. If the downward momentum prevails, the next level to watch will be the important support level of 1.1100.

GBP/USD

The GBP/USD pair was relatively unchanged as the market waited for the next move by Johnson. Nonetheless, the pair moved slightly below the important support level shown in green below. The price is along the 14-day and 28-day moving averages. The RSI has continued to move sideways while volume has declined. This is an indication that the pair may breakout in either direction. This will depend on what will happen on Brexit.

USD/CAD

The USD/CAD pair rose today after the Canadian election results. The pair ended a sharp downward trend that had seen it drop from a high of 1.3346 to a low of 1.3030 in the past week alone. The pair is still below the 14-day moving averages while the RSI is emerging from the oversold level. There is a possibility that the pair will continue moving higher because the much-awaited election has been completed. If it does, the pair will likely test the 23.6% Fibonacci Retracement level at 1.3135.