The commodity currency, Canadian dollar, edged higher against the greenback over the previous week. The USD/CAD pair dropped nearly 245 points to close at $1.3212, the lowest level since February 2017. The USD/CAD has a strong negative correlation with the WTI crude oil. This is because the Canadian economy's revenue comes from crude oil export, nearly 70% from the United States.
Despite the dramatic drop in the oil prices, the demand for the loonie strengthened. The bullish momentum in the Canadian dollar came in response to the hawkish remarks from BoC Governor Poloz. He had said that rate cuts had “done their job” as the economy extended to upgrade.
4 Opportunities To Trade The Loonie
- Wholesale Sales m/m (Tuesday – 12:30)
- Core Retail Sales m/m (Thursday – 12:30)
- Retail Sales m/m (Thursday – 12:30)
- CPI m/m (Friday – 12:30)
Forex Trading Signal – Idea
The crucial trading level is $1.3175. The idea is to stay in buying above this level with an aim of $1.3300 & $1.3375 with a stop loss below $1.3535.
USD/CAD – Bullish Channel On Weekly Chart
Technical Outlook- Weekly
On the weekly chart, we can observe a slightly upward channel, which begins at $1.2459 (May 3, 2016) to $1.3164 (June 16, 2017). At the moment, the loonie is holding right above the lower edge of the bullish channel, with a major support at $1.3175.
Considering the fundamentals, the pair has the potential to pull back from the lower corner of the bullish channel to test the next resistance of $1.3310 & $1.3380.
The momentum indicators, the leading indicators, the 20 & 50 periods moving averages are signaling a selling bias.
USD/CAD – Key Trading Levels
Support Resistance
1.3165 1.3399
1.3093 1.3471
1.2976 1.3588
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