USD/CAD: daily update
Canadian dollar weakened to a new 2-week low of $1.0440 on Wednesday, losing ground ahead of the FOMC minutes release. USD/CAD is testing the levels above the 2010-2013 resistance line.
Pressure on the loonie persists as the emerging economies are showing more weakness than the US and EU these days. Canada’s economy is clearly facing headwinds. Yesterday’s data confirmed worries, showing retail sales contracted by 2.8% m/m in June (the biggest decline in 4 years). Economists now expect Canada's economy to contract by about 0.5% in June.
TD Securities: Key short-term resistance is seen at 1.0425/45 and USD is essentially range-bound until this level breaks. We are slightly more optimistic for the pair in a longer term. Strong support is seen at 1.0300, so it makes sense to buy the pair on dips.
Chart. H4 USD/CAD