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USDCAD Hitting Bottom?
The massive rally in oil and the anti-dollar flows have propelled loonie to its strongest reading in more than 4 months as the pair broke the key 1.3000 figure in todays trade. The pair will no doubt continue to move in tandem with crude and oil goes above the $40/bbl there may be more downside to come.
However, having no dropped below the key 1.3000 mark USDCAD is facing much deeper support on the daily chart as it comes back to the point of breakout. If oil stabilizes the market may start to look back at the fundamentals. Tomorrow FX traders will get a glimpse of CPU and RetaiL Sales data. The forecast is for a strong jump in both, but if the data misses it may take some of the air out of the loonie.
For now the 1.2800-1.3000 zone should act as serious level of support while the upside is likely capped by the 1.3500 figure.