The Canadian dollar is under pressure today despite the turnaround in oil prices. The U.s. dollar is strong and investors are still worried about President Trump’s tweet about oil prices being too high last week. The unexpected drop in wholesale sales this morning put pressure on the loonie. This number isn’t closely followed but is a reflection of the overall demand. USD/CAD has broken above 1.2800 and is testing 1.2850.
The next stop should be 1.29. At the end of last week, softer retail sales and consumer price growth reinforced the Bank of Canada’s caution. Although CAD policymakers sounded slightly less pessimistic this afternoon, they remain worried about NAFTA and feel that underlying issues are evolving well enough to send an unambiguously positive signal to the market.
Technically CAD/CHF is looking very ugly with the pair closing last week and opening today below the 200-day SMA and first standard deviation Bollinger Band. CAD/CHF should drop to 76 cents and if it falls below that, the next stop should be .7560, which is just above the 20 and 100-day SMA