USD/CAD – How High Can it Rise?

USD/CAD – How High Can it Rise?

USD/CAD – How High Can it Rise?

Over the past 3 trading days, we have seen USD/CAD soar close to 300 pips, which is significant for the slow moving pair. On Wednesday the currency pair broke through 1.25 to reach its strongest level in 2.5 months. With no economic reports released today, the move was driven by lower oil prices and a stronger dollar. The price of oil dropped 4% on the back of the first rise in crude stockpiles in 2 months and progress on the Iranian nuclear talks. Earlier this week we learned that Canada’s economy contracted 0.1% in the month of May. This follows the 0.1% decline in retail sales that same month. All of these factors have contributed to the weakness of the currency and if tomorrow’s U.S. non-farm payrolls report is strong, we could see further gains in USD/CAD.

Technically, there are a number of resistance levels ahead with the most important being 1.2635, the 50% Fibonacci retracement 2002 to 2007 decline. If it is broken then the main focus will be the March high of 1.2835 although any move could lose momentum near the 1.28 handle like it January and late March. If USD/CAD drops back below 1.25, then a deeper correction to 1.24 is likely.

Chart Of The Day

Leave a Comment

Your email address will not be published. Required fields are marked *