Today we’d remain focused on North America as we explore the developments around the exchange rate between the American and Canadian dollars, a pair that is quite volatile right now. Previously the USD/CAD was in a bearish trend, though recently it began to take some bullish turns, and the pair went through several price exhaustions as we’ve seen many news from the region in the past days. Yesterday Ms. Wilkins from the Bank of Canada gave a speech on interest rates and other matters of monetary policy that could impact the Canadian dollar, but there was nothing in that discussion to encourage investors. That is why the USD strengthened against the CAD and closed above 1.3450. In the United States we expect a new report on the manufacturing index. The forecasted result is 25.6. We are also awaiting the unemployment claims report forecasted at 241,000. Depending on whether or not these two statistics turn out better than expected, the USD might strengthen even more.
From a technical standpoint, the USD/CAD is in a price channel and, as we already mentioned, closed above 1.3450. Currently the bulls have the upper hand on the market, so likely the price will go up and even touch the resistance levels of 1.3535 and 1.3550. If those really are overcome, keep an eye on the level 1.40, as that would be our next important target.
