USD/CAD continues to retrace from last week’s high near 1.0450. The Canadian dollar has been buoyed by the Chinese rate cut and Australian employment data.
Dovish comments from Bernanke could further weigh on the pair but don’t forget about the Ivey PMI at 1500 GMT and tomorrow’s Canadian jobs report. The Ivey data is volatile tends to spark an oversized reaction that can be faded.
Technically, the 21-day moving average at 1.0220, the 3-week low at 1.0207, and the 38.2% retracement of the May rise at 1.0199 are support. A break lower targets 1.0120/25.
Oil +1.4%, copper +0.6% and SPX futures +0.8% all helping the Canadian dollar. We’re clearly in a retracement phase and I believe it will end tomorrow or early next week.
