USDCAD to 1.35?

USDCAD to 1.35?

USD/CAD soared to a 7 month high this week on the back of softer data and dovish comments from the central bank. According to the latest reports, retail sales continued to decline while consumer prices grew less than expected, validating the Bank of Canada’s strongly worded guidance. After cutting their 2016 growth and inflation forecasts, Bank of Canada Governor Poloz took to the podium, expressed his frustration with exports and said the central bank actively discussed more stimulus and indicated that housing measures won’t stop them from easing further. Fundamentally, the central bank’s bias and data supports a continued rally in USD/CAD

Technically, USDCAD is overbought but there’s no resistance from here to 1.3457, the September 2015 high. Chances are the rally will stall at that level as there is a very clear head and shoulders pattern in the monthly chart. Support is at 1.3160, the 200-day SMA.

Chart Of The Day

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