The Canadian dollar keeps marching forward, taking full advantage of every rise in oil prices while not getting over excited with slides in the price of the black gold.
USD/CAD is now trading at levels last seen in December, approaching a line that was fierce resistance for long months. Will it break lower?
It used to be different for the C$: On every fall in oil prices, CAD would crash, and would hardly recover on any move higher. The big change came when the Bank of Canada decided NOT to cut rates in mid January. That day, January 20th, is also clearly seen on the chart: it’s when USD/CAD nearly touched 1.47.
1200 pips lower, we are now close to 1.3460: this line was a high level in October. After falling below 1.30, the pair advanced once again, with a failed first attempt to break in November. The second one already succeeded, turning into a huge rally.
With a weak Canadian dollar, the BOC saw no need to act and the trend reversed. The low so far today has been 1.3481, and from there, the pair is bouncing. Nevertheless, the move lower for USD/CAD and up for the loonie remains quite strong.
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