USD/CAD Headed Below 1.29?

USD/CAD Headed Below 1.29?

USD/CAD Headed Below 1.29?

For the past 4 trading days, USD/CAD has been unable to close above 1.3100 and we believe this struggle signals the risk of a deeper correction. On a fundamental basis oil is creeping back towards $50 a barrel. Canadian GDP numbers are scheduled for release on Thursday and given the sharp rise in Canadian retail sales along with the improvement in the trade balance, the risk is to the upside for the report. If quarter end flows continue to impact the markets on Thursday, it would extend the risk on rally in the loonie.

Technically, USD/CAD has and should continue to reject the 100-day SMA. Support is at the 50-day SMA at 1.2875 – that’s where we see the pair headed. However if it breaks above 1.3150, the next target will be 1.32.

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