Established in 1974
185,800 clients worldwide
Over 15,000 markets

Buy USD/CAD dips

While focus in global markets has been on the euro and AUD in anticipation of central bank moves, CAD crosses have been the place to be. 

USD
Source: Bloomberg

Ever since the Bank of Canada (BoC) cut rates and flagged economic challenges as oil prices slid, it has been one-way traffic for the CAD. The CAD has weakened significantly and has been tracking the moves seen in oil prices.

USD/CAD has taken off and has been rising exponentially since squeezing through the $1.2000. The pair has now rallied to a high of $1.2677 and is deep in overbought territory. Coincidentally oil prices are also experiencing some short-term stability and this could result in some near term profit taking. As a result I will be looking to buy the pair on pullbacks.

Ideally the support zone in the $1.2400 region will present buying opportunities. This is a congestion zone and is also the 23.6% retracement of the rally from December 31 lows to yesterday’s highs. The fundamentals remain sound on the USD side of the equation with unemployment claims dropping to a 15-year low. This will keep the upbeat tempo around the economic assessment. 

USD/CAD

USD/CAD

USD/CAD
Source: Bloomberg

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts