Hawkish BoC shifts, oil price rebound and a softer USD are the key drivers to CAD in past few weeks. In the commodity currency space, USDCAD continues to dig lower as Poloz’s comments added fuel to loonie bulls.
Recent Canada economic data is encouraging and Bank of Canada being more positive on the domestic growth outlook. Upcoming BOC meeting on July 18th is crucial.
USDCAD has retraced near 1.30 and trading below 100WEMA. It gave a bearish breakdown through two-year ascending trendline.
Near-term support finds at 1.30 and the 61.8% (1.2462-1.3793 rally) finds at 1.2960 rounded. The daily RSI is oversold and the oscillator is bullish. We forecast the selling pressure likely to arrest between 1.30 and 1.2960 levels. In this case, 1.3160 and 1.3220 are the destinations expected.
Intraday support: 1.3000, 1.2960 and 1.2900.
A breakdown below 1.2960 signals a further leg down to 1.2830/1.28, 1.2730 and 1.2500/1.2470 in the medium term.
key level: The weekly higher swing low and a double bottom (Jan, and Feb 2017) on the monthly chart coincides with a 61.8% (1.2462-1.3793 rally) 1.2965 rounded to 1.2960.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
What is your Technical View?
Do you have a different idea? Please leave us a comment and get an answer from our professional analysts.