USD/CAD at new highs

USD/CAD keeps setting new highs: today American currency reached 1.0663, the highest level since August 2010.

Canadian dollar weakened ahead of the Bank of Canada’s meeting tomorrow (15:00 GMT). The consensus forecasts is that the central bank will leave the benchmark rate at the current level of 1%, but there’s speculation of a rising possibility of a rate cut rate (because inflation in Canada declined). As a result, the BOC’s accompanying statement will be very important.

US dollar, on the other hand, is supported by the solid American manufacturing PMI figures and the expectations of the Fed to taper QE soon. Further on Friday we’ll get key Canadian and US employment data, so this week will be really defining for the pair’s trend in the near/medium future.  

Note that the pair got oversold on the daily chart. There’s also divergence on MACD and RSI at H4. Resistance lies at 1.0665/1.0685 (June-August 2010 highs) and then 1.0700. Support is at 1.0605, 1.0560 and 1.0500/0480.

Chart. Daily USD/CAD


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