USD/CAD[1] Price, Chart, and Analysis
- The Loonie continues to benefit from a red-hot oil[2] complex.
- The move lower is stalling ahead of strong support.
For a list of all market-moving data releases and events see the DailyFX Economic Calendar[3]
The drift lower today in oil[4] has taken the heat out of the recent Canadian dollar[5] outperformance but the overall, and likely ongoing, strength in the oil market will continue to brace the Loonie in the weeks ahead. The Canadian dollar has also been boosted by the rise in short-term Canadian bond yields as the market prices in future interest rate hikes by the Bank of Canada.
The latest look at market expectations for further Canadian rate hikes show an unbroken series of rate increases all the way through to the end of the year, underpinning the currency further.
The daily USD[6]/CAD chart shows the extent of the Canadian dollar’s outperformance against its neighbor over the last two weeks. The slide below all three simple moving averages suggests that this move may have more to go in the medium-term although support around 1.2450 will likely hold at least the first attempt. The CCI indicator shows the pair in oversold territory and this needs to be washed out before the pair can attempt to move lower. It is likely that the pair will consolidate around current levels before making the next move.
Retail trader data show 68.90% of traders are net-long with the ratio of traders long to short at 2.22 to 1. The number of traders net-long is 5.02% lower than yesterday and 14.75% higher from last week, while the number of traders net-short is 3.66% lower than yesterday and 7.48% higher from last week.
