The USDCAD exchange rate made a “U” turn and recovered all the losses to close the last week on a positive note. The weekly close above the big psychological number 1.3000 shows that the bulls are still in control. However, the stochastic indicator is displaying an extreme overbought reading, which suggests that we’ll see the big round number 1.3000 challenged again. As long as we trade above the big round number 1.3000 on a daily closing basis we should favor the upside.
Last week high 1.3071 followed by the key resistance level 1.3175 are the levels to keep an eye on. On the downside, last week low 1.2887 is really the line in the sand between the bulls and bears. A break below 1.2887 will signal a shift in the trend direction. We have some big risk events scheduled on the Canadian economic calendar. On Wednesday we have the BOC interest rate decision, which is expected to keep rates on hold at 1.5%. On Friday, the unemployment figures will shape the price action.
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