The USDCAD manages to break again above the big psychological number 1.3000 setting the tone for more strength. The strong weekly close above the big round number has opened the door for a retest of the next important resistance level 1.3220. Only a daily break and close below 1.3000 can shift the sentiment and open the door for a possible retest of the support level 1.2920.
The stochastic indicator is only showing a very modest reading above the 80 level. There is still room before we really have an extreme reading. As a major risk event we only have the CPI inflation scheduled on the Canadian economic calendar. Based on the market consensus the inflation rate in July should come flat at 0.1%, but the year-on-year inflation reading is expected to inch lower to 2.4% down from 2.5% previous reading.
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