After yesterday’s statements from the Fed policymakers at the FOMC, in which they expressed strong doubts on the Global Economy situation and on the inflation level, the speakers disagree on the timing for the next rate hike: some of them expressed their preference for March, while others indicated April as better.
On the back of these statements, the market started to sold the greenback against his current peers, pushing it down.
The general risk-on tone on the market, moreover, have positively influenced on the Oil price which, pushed by the unexpected drop in the inventory, at the moment is traded positively (WTI at $38,11bbl and Brent a $40,15bbl respectively +0,36% and +0,31%) boosting the downside of the USD.
The currency certainly benefitting from both the movements is the CAD, which after the USD drop and the Oil spike, at the moment is making the second consecutive positive session, bringing the USD/CAD to trade at 1,0321 with a negative performance of 0,52%.
Moreover, following DB, the count of the short contract done by the traders on the CAD during last week is decreased of almost 9k, bringing to light a better picture for the Canadian currency.
From a technical point of view, looking at the USD/CAD chart, we can see the first support at the 1,2858 level (2016 low on the 31st of march). A braking of this level could bring the gross to test the second significant support at 1,2827. On the opposite side, even if unlikely to happen, the first resistance could be positioned at 1,3118 (20-day SMA).
All the market will be looking at an important event for the Canadian country this afternoon: the February building permits expected to be 4% after the negative data of 9,8% of Genuary.
Even if it will be indicative for the health of the country’s economy, the movements of the currency will be related to the USD and Oil prices, which, for the first one, should be relevant waiting for tonight’s Yellen speech.