Dollar/CAD advanced despite many things going in favor of the C$. Is it a correction to the big move following the jobs report? The Bank of Canada is left, right, and center in the upcoming week. Here are the highlights and an updated technical analysis for USD/CAD.
The BOC’s business survey was quite bullish on the economy, keeping the momentum after the excellent jobs report. Oil prices reached the highest levels since December 2014 and the US dollar suffered a sell-off of sorts following a report that China will halt or slow buys of US Treasuries. All this should have led to a fall of Dollar/CAD, but the reality was different. A correction after the superb jobs report and three misses on Canadian housing figures weighed: housing starts, building permits, and the NHPI all fell short of forecasts. The ball is now in the court of the BOC.
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
* All times are GMT
USD/CAD Technical Analysis
Dollar/CAD could not fall to lower ground and eventually advanced, tackling 1.26..
Technical lines from top to bottom:
1.2920 capped the pair in late October and turned into a double-top in No. It is followed by 1.2840 capped the pair in mid-November and also had a role in the past.
1.2790 was the high in mid-November and serves as resistance. 1.2665 was a was a double-bottom in November and works as strong support.
It is followed by 1.26, a round number that worked as resistance in October. 1.2540 capped the pair in early October when it traded in a narrow range.
1.2435 was a cushion for the pair during the month of October. 1.2335 gave support to the pair in late September.
I remain bearish on USD/CAD
Almost everything is going in favor of the C$, and a rate hike will cement it. Even if a rate rise will not come as a surprise, the optimism attached to monetary tightening should be positive for the Canadian dollar.
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