USD/CAD: technical & fundamental

USD/CAD tested 1.0967 on Friday, but then returned to the levels above 1.1000. Canadian dollar got boost from good Canada’s labor market data (payrolls rose by 29.4K, while unemployment rate declined to 7.0%). The speculation that the Bank of Canada will cut interest rates to spur the economy decreased.

UBS points out that the pair formed a top at 1.12 and stabilized in the 1.11/10 area. The analysts remind about the improvement in Canada’s Ivey PMI in January and reaccelerating producer prices. However, the bank doesn’t propose to go short at USD/CAD now.

According to SEB Bank, the false downside break strongly suggests that we now have completed a short term correction, formed a hammer and cleared the table for renewed upward pressure. The downside false break buy signal will be further enhanced above 1.1123. Support lies at 1.0978 (23.6% Fibo) and 1.0900.

According to FBS, the bulls have firstly to push the price above 1.1030/40, the previous important support area. Further direction of the pair will be clearer after the Fed Yellen’s testimony tomorrow. 

Chart. Daily. USD/CAD

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