After slipping overnight (high of 1.0285 in Dollar/Canada) on weak flash German PMI and weak HSBC China PMI earlier, the Canadian Dollar is firming again as eurozone and US stock markets rally. Dollar/Canada holds at 1.0255-60, up from an earlier low around 1.0251.
George Davis and Paul Borean of RBC Capital Markets say “Last week’s close above 1.0175 triggered a bullish trend reversal in USD/CAD, with 1.0284 now serving as the next resistance hurdle to watch.” A daily close above 1.0284 would target 1.0359, they say.
On the downside, Dollar/Canada will need to get back below an “old descending trendline,” now at 1.0148, for a shot at 1.0100, the next interim support. RBCCM says pullbacks to these two levels will likely see buying interest looking for a new push higher. “A break below the April month-to-date low at 1.0084 will be required to re-establish corrective price action and expose 0.9974 on the downside,” Davis and Borean say.