Giving his latest strategic forecast for the US dollar vs Canadian dollar, Jeremy Stretch at CIBC Markets writes:
Despite seeing the CAD trading on the defensive in yesterday’s session the failure of USD CAD to close above the 100-day MAV, (1.3087) is significant, at least in the short run.
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While we maintain our conviction of USD CAD extending back towards 1.36/37 within the next couple of months, the current modest rebound in risk sentiment, which has also encouraged an oil bounce, prompted a test towards 1.2965/75 support.
Only should we see a close below 1.2950 are we likely to see the correction extend back towards the 50-day MAV at 1.2871.
However, amidst expectations of a soft patch in Q2 domestic growth, allied to the expectations of risk off tendencies being set to persist, as Brexit uncertainties remain, favours looking to buy dips.