USDCAD Trend Line Break

USDCAD is on watch today with the retail market holding a heavy long position in the pair.  The Canadian Dollar has emerged as one of the strongest performing currencies on Friday creating plenty of room for further downside in the pair as USD continues to head lower. Weaker-than-forecast CPI and PPI readings out of the US this week have seen USD coming under heavy selling pressure. Looking ahead today, the focus is on the March retail sales data due which holds the potential to drive further selling in USD if the expected weakness is confirmed.

Oil prices have been benefiting from the weakness in USD this week. However, recession risks have acted as a counterweight to that benefit. Still, with OPEC having recently slashed production while signalling a willingness to do so again if needed, oil prices should continue to grind higher near-term, keeping CAD supported.

Technical Views

USDCAD

The reversal lower in USDCAD has seen the market trading lower within a clear bearish channel. Price has recently broken through the long term bull trend line. And is now fast approaching a test of the 1.3208 lows. This is a big level for the market and a break lower here will open the way for a deeper run towards 1.2962 next week.