USD/CAD: outllook for April 10-14
USD/CAD continues to trade mostly sideways in the broad consolidation range of 1.3260 – 1.3455. On Tuesday, the greenback spiked to 1.3455 after we got a disappointing trade balance release out of Canada. Towards the end of the week, loonie managed to snatch substantial gains and recoup some of its losses due to surging oil prices. The latter ones hit their last month highs (Brent oil futures reached $56.07 on Friday) after the launch of US missiles against a Syrian government airbase. The US labor market report released on Friday was a mixed bag with the better-than-expected unemployment rate and missing NFP data.
Next week the Bank of Canada will announce its rate statement on Tuesday at 5:00 MT time. There is a small risk of a significant change in the bank’s current policy stance, as economic performance of the country and Canada’s inflation figures have little changed from February. Country’s exports are still facing some challenges with competitiveness and protectionist rhetoric increases in the US. A dovish stance of the bank will keep Canadian yields and the loonie under pressure. Any hawkish skew in the statement can lead to the short-term appreciation of the CAD. In the end of the week, traders should be focused on Canadian manufacturing sales and US inflation figures.
At the present moment, the technical outlook for the pair is neutral. If prices break the upper border of 1.3260/1.3455 consolidation range, there will be a continuation of the rally towards resistances at 1.3533 (March 9 high), 1.3600. On the downside, the immediate supports can be found at 1.3290/1.3260 levels.
