Forex Investment and Currency Trading

There are no significant data releases scheduled today, with the resulting limited event risk presenting the scope for a quiet start to the week. The February Canadian international securities transactions data is unlikely to move markets, while there are no data releases scheduled in the U.S. Three Fed officials are scheduled to speak today, but none of the topics are considered market-moving in nature. Keep in mind that the BoC interest rate decision is tomorrow, with market forecasting a 50bp cut in rates.

Short-Term Outlook: Valuations Favour a Move Higher Today

With the hourly studies generating a buy signal from oversold levels, support at 1.0041 and 0.9991 is expected to attract short-term buying interest for a test of initial resistance at 1.0099.

Medium-Term Outlook: Still Trapped in a 0.9724-1.0343 Trading Range

USD/CAD remains confined to a 0.9724-1.0343 trading range that has been in effect since last November. Pullbacks to support at the bottom end of the range - 0.9996, 0.9826 and 0.9724 - are expected to attract medium-term buying interest for a test of initial resistance at 1.0244. A daily close above this level would favour an extension to the top end of the range at 1.0343.

We are loathe to fight the downtrend in the USD from a technical perspective, as there is no evidence of any bullish trend reversals present for the greenback at the moment. As such, do retain a bias to fade rallies in the USD, looking for another selloff ahead.