USD/CAD (current price: 1.2635)
The Canadian Dollar gained on the USD yet again, even though Canadian Wholesale Sales came in at -2.2% compared to consensus estimate of -0.4%. Bank of Canada Governor Poloz gave another speech yesterday, but that didn’t change the course of the currency. The Loonie defied the oversold conditions we mentioned in our previous reports, and fell below 1.26 with the help of the strong rally in oil. Today’s ECB decision and the expected widespread volatility could push the pair higher from the current oversold levels.
Our assessment: USD/CAD still looks oversold after drifting even lower yesterday, and the decline looks more and more likely to end, at least temporarily.
