USDCAD has been trading inside a descending channel on its 1-hour time frame and has just bounced off support. Another test of the resistance around the 1.3050-1.3100 levels could take place soon.
The 100 SMA is below the 200 SMA so the path of least resistance is still to the downside. For now, the 200 SMA is already holding as dynamic resistance and might be enough to keep gains in check.
Also, stochastic is indicating overbought conditions and might be ready to head lower. RSI is also in the overbought area and is starting to head south so price might follow suit. If so, a move towards the previous lows near 1.2750 could be seen
Leaders of oil-producing nations failed to reach an agreement to cap production in their meeting in Doha. Although some nations such as Russia seemed willing to push through with the deal without requiring all nations to participate, Saudi Arabia insisted that Iran should cooperate.
Meanwhile, data from the US came in mostly weaker than expected on Friday, with industrial production and capacity utilization missing expectations. The UoM preliminary consumer sentiment index also showed a decline in optimism. On the other hand, the Empire State manufacturing index rose from 0.6 to 9.6 to reflect stronger industry growth.
For today, only a testimony by FOMC member Dudley is due. US building permits and housing starts are up for release tomorrow. There are no reports lined up from Canada but BOC Governor Poloz has a speech scheduled tomorrow. Dovish remarks or cautious comments regarding crude oil could lead to more losses for the Loonie.
By Kate Curtis from Trader’s Way