USD/CAD: oops! "Quick, double up and buy it back"

Ross J Burland FXStreet

Currently, USD/CAD is trading at 1.3346, up 0.46% on the day, having posted a daily high at 1.3364 and low at 1.3278.

USD/CAD has recovered in dramatic fashion after the drop from 1.3386 down to 0.3276. The pair is now back testing the mid-way point of the 1.33 handle.

The Loonie got a boost when the Bank of Canada's Governor Poloz was piling into the questions coming from parliament in the US session when he said that the decision on whether to cut rates again is not one to take lightly and that the best plan right now is to wait on rates while there being room still to adjust monetary policy if needed. However, when he said, "Our best plan right now, we think, is to wait for the next 18 months or so", markets thought he meant in respect to interest rates, so the recovery came when he said that the statement wasn't related to rates being on hold.

"My statement concerning the need to wait 18 months was in reference to the time frame over which the output gap is expected to dose, as noted in the Bank's October Monetary Policy Report. It was not intended as a reference to the Bank's monetary policy," - and back USD/CAD goes!

USD/CAD levels

"With the USD closing above resistance at 1.3315 (long-term retracement resistance) Friday, we think there is no real impediment to the USD pushing on towards 1.35," argued analysts at Scotiabank.

Meanwhile, spot is presently trading at 1.3347, and next resistance can be seen at 1.3348 (Hourly 20 EMA), 1.3364 (Daily High), 1.3388 (Daily Classic R1), 1.3399 (Yesterday's High) and 1.3438 (Daily Classic R2). Support below can be found at 1.3338 (Monthly High), 1.3338 (Weekly High), 1.3306 (Daily Classic PP), 1.3287 (Daily Open) and 1.3286 (Yesterday's Low).

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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