USDCAD, Daily
USDCAD has remained buoyant this week, rising back above 1.3300 today. Market participants are still digesting last Friday’s release of underwhelming retail sales and cooler than anticipated inflation data out of Canada. BoC Governor Poloz is scheduled to speak today, which will be the final policymaker outing ahead of the July 11 rate announcement. Expectations are rising for a 25bp hike, though with weakened conviction following weaker data and the persistent uncertainty over NAFTA. Overall, there is a bullish view of USDCAD, although the surge in oil prices over the last two days has taken a little vim out of this view.
Technically, the rally triggered over the 20 day moving average on May 24 was followed by strong confirmation with the breakout the following day, as it closed over 1.2940 – the 50% Fibonacci level from the weekly time-frame cluster of fractal highs. The 20 day moving average has provided support as the trend developed, breaking the next key Resistance at 1.3050 (psychological and significant round number) on June 14. The erosion in the NAFTA sentiment has simply added to the USD bid in the rally to 1.3300. RSI skirts the overbought zone and a consolidation around current levels could be expected if there is to be another leg higher. Next Resistance sits at 1.3350 and 1.3375, Support at 1.3280 and 1.3250.
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Stuart Cowell
Senior Market Analyst
HotForex
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