The USDCAD has found a footing after last Thursday posting a new correction low of 1.2432, which extended the pullback from the recent seven-week peak at 1.2600. The move was driven by broader softness in the U.S. dollar, with the combined impact of the FOMC minutes from the September meeting and sub-forecast U.S. CPI data last week, weakening the conviction of market expectations for a December rate hike. Neverthless, the run up in WTI crude prices yesterday provided little loonie support, as USDCAD buyers emerged ahead of the 50-day moving average of 1.2455. With oil back under $52 again, the pairing has maintained altitude above 1.2500. The BoC outlook survey also put a floor under USDCAD, revealing further evidence that another rate hike is not likely in the cards at next week’s BoC policy meeting.
The holding today above the 20-period MA in the hourly chart, at 1.2530, despite the weakness seen on European open (Sharp down candle along with a doji one), triggered our LONG position at 1.2532 near term Target 1 at the 4-hours ATR, at 1.2550 and Target 2 at 1.2572. Support set at 200-period MA at 1.2495. Further down support arrives at round level, 1.2400. This position fall in with the higher timeframes, such as Daily one. In a Daily time-frame , the pair is well support by the 20-DAY MA and 23.6 Fibonacci level. It is moving in an uptrend since September 8, with Stochastics sloping upwards.
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