The market has pushed Usd/Cad down to support on the 4 hour chart at around 1.2250, in response to weak U.S. based data and higher commodity prices. That may all get tested during the course of the coming week as economic data may confirm some market participants’ thoughts that the Bank of Canada may follow the major regions by instigating a round of quantative easing in an effort to create C$ money flows.
“We have not been looking at the cad pair for anything other than contrarian trades that get sold at 1.3000, and bought at 1.2150” said TheLFB-Forex.com Trade Team. “It will be a pleasant change to get some cad trades into the mix because right now the pair really has only been offering 4 hour chart channel trades. The real test will be if 1.2000 gets broken going short because there looks to be a momentum play to 1.1850 if equities and oil find bids this week. Without strong release data the long side may soon be seen” they said.
It all sets up a week of economic releases from Canada that if better than expected could break the low side of the channel on Usd/Cad, or if as expected could start building for a test of 1.3000.