Canadian dollar recovered sharply from 3-1/2 month low in previous week on higher oil prices. USD/CAD hits low of 1.27021 and is currently trading around 1.27677.
Bank of Canada governor Stephen Poloz maintained a neutral stance on interest rate hike and defended the use of inflation target. He also reiterated that Central bank will be cautious on further rate hike even if wage growth shown up.
Crude oil soars almost 6% previous week on geo political tensions in Saudi. Baker Hughes has reported that number of rigs has fallen for the week almost 11 rigs highest in this year. Brent crude hits high of $64.62 and is currently at $63.31. But rising oil prices is expected to support Canadian price.
Technically on the higher side near term resistance is around 1.2835 (61.8% retracement of 1.29167 and 1.27020) and any break above will take the pair to next level till 1.2900/1.2928 (50% retracement of 1.. Bullish continuation can be seen only above 1.2928.
The major support is around 1.2710 (23.6% retracement of 1.20613 and 1.29148) and any break below will drag the pair to next level till 1.2610 (100- day MA)/1.2520 (38.2% retracement of 1.2060 and 1.29167). Minor weakness can be seen only below 1.2600.
It is good to sell on rallies around 1.2825-1.2830 with SL around 1.2928 for the TP of 1.2605./1.2505.