The USD/CAD increases significantly in the last weeks and was almost to reach a very strong resistance level. Price decreased in the yesterday’s trading signal as the USDX plunged on the short term, but the buyer’s are still in the game and are trying to send the rate higher.
It remains to see what will happen because the rate is under some pressure after the impressive rally, a minor retreat is natural.
You should be careful in the afternoon because the rate will be driven by the fundamental factors, remains to see the direction. The US ADP Non-Farm could be reported at 199K in February, less versus the 234K in January, the Trade Balance could drop further, from -53.1B to -55.1B. The Revised Nonfarm Productivity could drop by 0.1%, matching the 0.1% drop in the former reading period, while the Revised Unit Labor Costs indicator is expected to increase by 2.1%, beating the 2.0% growth in the former reading period.
The US Beige Book and the Consumer Credit will be released tonight, the Crude Oil Inventories could pressure the Loonie if will increase more than expected.
Maybe will be better to stay away from the USD/CAD in the US session because the high volatility could ruin your account, the BOC Rate Statement and the Overnight Rate will shake the price. The BOC is expected to leave the rate unchanged at 1.25%.
The Canadian Trade Balance could increase a little from -3.2B to -2.5B in January, while the Labor Productivity could increase by 0.1% after the 0.6% drop in the former reading period.
The USD/CAD was almost to reach the upper median line (UML) of the major red descending pitchfork and the 1.3047 static resistance. It could come back down to retest the upper median line (uml) of the blue ascending pitchfork. A failure to reach the UML will signal an overbought and a potential drop on the short term.