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USDCAD – Back to 1.3000?
The loonie has been well bid this week, supported by a strong rally in oil and a generally passive BOC that offered no new stimulus plans to the market at yesterday’s meeting. But after a clean 300 point decline, USD/CAD may be headed back up as it targets the 1.3000 level.
The loonie faces a very tough event risk tomorrow in the form of the employment report. Although the market is looking for a sharp rebound from last month’s dismal -31K drop, traders may be in for downside surprise as most of the key economic indicators have shown a sharp deceleration in activity last month. If Canadian data prints second month of losing jobs in a row, the pressure on BOC to act will ratchet.
USD/CAD has found support at the 1.2800 level making yet another higher low and now could trade back up to range highs if the labor data misses its target.