Talking Points:

- USD/CAD Retail Sentiment Hits Fresh Near-Term Extremes Ahead of Canada Budget.

- USDOLLAR Outlook Remains Mired by Waning Bets for Fed Rate-Hikes; August Low in Focus.

USD/CAD

• Despite the softer-than-expected inflation report out of Canada, USD/CAD stands at risk for a further decline in the days ahead amid the recent series of lower highs & lows, while price & the Relative Strength Index (RSI) retain the bearish formations from earlier this year.
• With Canada’s budget statement due out on March 22, a meaningful fiscal stimulus package may heighten the appeal of the loonie as it takes pressure off of the Bank of Canada (BoC) to further support the real economy; may see a material shift in the monetary policy outlook should Governor Stephen Poloz show a greater willingness to move away from the easing cycle.
• Will keep a close eye on the downside targets as USD/CAD continues to search for support, with the next key area of interest coming in around 1.2860 (78.6% retracement) to 1.2831 (October low).

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