USDCAD charts never look pretty given the nearly every candle has long wicks in either direction, but the pair can prove to be a great trade for dollar strength (or weakness) as commodity currencies continue to fall out of favor. After carving out a bottom around 1.015, the USDCAD has been as parabolic as the dollar index surrounding Bernanke’s decision, which became more of a sell the news event.
Nevertheless, the USDCAD is at a key level after reaching recent highs. By stretching out the daily chart, we can see where the current price action is in regards to past price action. There was a little retrace after hitting 1.0487 to close the week at 1.0452. If the pair can break 1.0487, there is further upside at 1.0526 and revisit the one year high of 1.0656. I see short-term support at 1.042.
There is nothing on the cards this coming week for the Canadian dollar until Friday’s Canadian GDP figures. There is economic data regarding the dollar, such as new home sales, core durable good and initial jobless claims.