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USD/ CAD – Peaked?
USD/CAD has turned from one of the sleepiest currencies in the G-10 to one of the most volatile as the price of oil has effectively taken the unit hostage. But lately the swing in oil prices are having less and less impact on the pair as crude settles between $40-$50/bbl. Unless there is another sharp leg to the downside, it appears that the move in the loonie may be over for now with the pair having set a near term top at 1.2800 level. With the market paying less attention to the swings in WTI, the loonie is likely to move back to trading on fundamentals. Tomorrow’s Retail Sales could surprise to the upside especially since Wholesale sales have soared in the past month and that is likely to send USD/CAD even lower.
USD/CAD has formed a clear triple top with lower highs suggesting that upward momentum is no longer there. The 1.2800 level remains the operative resistance to the topside while 1.2000 is most immediate near term support.