USD/CAD slightly higher after three days of heavy selling
Broad US dollar strength today shored up USD/CAD ahead of a crucial zone of support near 1.30.
Today's low was 1.3054 and the Jan 17 low was 1.3043 with the Jan 12 low at 1.3030. October and late September lows also neared 1.30 before rebounding.
The rule of thumb in technical analysis is that something that can't definitively reject a level will eventually break it. There have been roughly five tests of 1.30 since September and they've all held. The last one was saved when the Bank of Canada said a rate cut was still on the table but a week later and it's been erased.
Part of the story is oil. Crude prices are 2% higher today and earlier this week, Trump signed an executive order that will clear the way for the Keystone XL pipeline. If built, it will narrow the discount on Canadian oil.
I hear a lot of chatter about bottom picking in this pair and bullish calls for 1.40. That's the kind of thing you usually hear when it's headed in the other direction.
