USD/CAD breaks below 1.3100, fresh lows

Pablo Piovano FXStreet

The Canadian Dollar is appreciating further vs. its American neighbour on Wednesday, now dragging USD/CAD to fresh multi-month lows near 1.3070.

USD/CAD now focused on Poloz

The continuation of the selling bias around the greenback is prompting the pair to retreat to the sub-1.3100 area, levels last seen in February 2016.

In the meantime, CAD is currently ignoring the daily correction lower in crude oil prices, focusing instead in the yield spread differential vs. the buck, specially in the shorter end of the curve.

Canadian yields of the 2-year reference have extended the breakout of the psychological 1.0% mark for the first time since May 2015, reaching levels above 1.02% although deflating somewhat later.

Ahead in the session, BoC’s Governor S.Poloz will speak at the Policy Panel at the ECB Forum on Central Banking, grabbing a lot of attention in light of his recent shift to a more hawkish message regarding monetary policy.

USD/CAD significant levels

As of writing the pair is retreating 0.88% at 1.3083 and a break below 1.3054 (low Feb.24) would aim for 1.3007 (low Feb.16) and finally 1.2967 (2017 low Jan.31). On the other hand, the next up barrier is located at 1.3233 (10-day sma) seconded by 1.3341 (200-day sma) and then 1.3349 (high Jun.21).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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