Forex: USD/CAD consolidates above parity (Barcelona) - The cross is extending yesterday’s upside and consolidating above parity level on Tuesday, as risk aversion seems to be taking a breather.

Light docket ahead in the week for the Loonie, as manufacturing shipments and Canadian portfolio are due, although the most relevant event will be the BoC Review on Thursday.

According to Camilla Sutton, Chief Currency Strategist at Scotiabank, “we recognize that near-term risk of USDCAD upside has risen but we have made no change to our medium-term outlook for USDCAD downside (CAD strength) based on relative monetary policy, domestic drivers, Canada’s triple-A rating and investor sentiment. We hold a 2013 year-end target of 0.96”.

As of writing, USD/CAD is up 0.20% at 1.0019 with the next resistace at 1.0034 (high Nov.9) ahead of 1.0070 (Upper Bollinger) then 1.0077 (high Aug.3) and 1.0085 (high Aug.2).
On the other hand, a breach of 0.9996 (low Nov.13) would expose 0.9986 (low Nov.12) then 0.9982 (low Nov.9) and 0.9980 (MA10d).

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