USDCAD is trading softer again as the bearish momentum quickly accelerates to the downside, a move partial motivated by stronger Oil prices. There is a strong inverse correlation between USD/CAD and Crude Oil price and the two weeks rally in the energy sector that has sent Oil near the big figure $50/barrel has prompted renewed USD/CAD selling pressure.
On a broader scale, the USDCAD technical pattern targets a wide range between 1.3250 July high and resistance level and 1.2653 June low which can act as support. The weekly close below the big psychological figure 1.3000 and breaking below the 200-day moving average encourages the USDCAD bearish case.
On a short-term basis, we have the first level of support at 1.2845 and only a Daily close below this support level will threaten a much deeper sell-off towards June’s low at 1.2653. To the upside the big round number 1.3000 will hold as a strong resistance and renewed selling pressure should appear near this level during the first trading day of the week.
The Canadian News calendar looks very light for the week ahead and there is nothing on the docket that can disturb the CAD volatility expect Friday’s Retail Sales which based on the market consensus we should see a softer reading of only 0.4% growth, down from 0.9%. Since the month of August has a very light volume of trading due to the holiday season more range activity should be expected.
USDCAD Weekly Forex Forecast – BEARISH
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