The USD/CAD is pushing hard to take out the 1.2800 price level for the day on rising crude oil prices and an optimistic economic outlook by the BoC.
Crude oil prices resumed their push towards the elusive $50 mark Thursday, staging a 1% rally on global recovery hopes.
Yesterday, the BoC held rates and kept its QE program intact but said it saw signs that the Canadian economy was recovering beyond expectations.
These scernarios have allowed the commodity-based loonie to maintain its bullish bias over the greenback, sending the pair below the 1.2800 mark.
Technical Outlook for USDCAD
The USDCAD has resumed the downside move after yesterday’s rejection at the lower boundary of the consolidation pennant pattern. The enormous boost in crude oil inventories in the US triggered this rejection.
The active candle now challenges support at 1.27831. This area’s breakdown also completes the bearish pennant pattern, opening the door towards 1.27315 and possibly 1.26021 as the pattern breakdown seeks to achieve the measured move from 1.29241 to 1.28342.
Conversely, a push above the pennant consolidation area that also clears 1.28342 invalidates the pattern and opens the door towards 1.29241. 1.29953 and 1.30385 are other targets to the north that may become viable with an advance in prices.
USD/CAD Daily Chart