CAD is among the best-performer currency pair during the last couple of week. The USDCAD plunged below the 2018 low on Thursday.
While considering the recent sell-off of the Loonie trading near the demand area the further direction will depend on both the US & Canada Employment report which will release later today.
Yes, today was High Impact News. So the volatility in the market was much higher. But I think the USD is likely to be strong from Monday.
Thank you so much for agreeing with me. Trading is a community and we are members of that community, so our views are very similar.
CAD is definitely in a strong bullish trend.
A key event to watch this week is the inflation report. BoC is seen as reactive to improving domestic fundamentals, so a jump in inflation might cause the market to expect the BoC to speed up the unwinding of their large-scale asset purchases (LSAPs) even further.
Given that the Fed continues to conduct LSAPs, with no end in sight anytime soon, this would be CAD bullish and we may see 1.2000 soon.
I expect the market to continue favoring currencies that have monetary policy divergence (like CAD and GBP) who are less dovish compared to central banks who remain heavily dovish (like USD).
CAD has been much stronger. So I don’t want to trade against the trend. However, the USD may be a bit stronger according to technical analysis.
