The US rates are higher today with the US two-year trading at 4.903% up 7.1 basis points and the US 10-year trading at 4.647% up 8.9 basis points (both are near highs for the day). Rates moving higher are acting as a tailwind for the USD including the USDCAD. The Ivey PMI was also weaker than expected helping to weaken the CAD in the process.
Having said that, there is work to do to give the buyers additional confidence after the sharp falls from last week which saw prices decline sharply over the last 3 trading days of the week.
The price of the USDCAD closed at 1.3652 on Friday. Today with the yields moving higher, the price is above that level. However, the high price has stalled ahead of the next target area between 1.3687 and 1.3700. It would take a move above that area to give sellers “cause for pause” after the sharp declines seen last week.
On the downside, watch the 1.3659 – 1.3668 area (see green numbered circles on the chart below). Moving below that area and there should be further downside momentum with the low price for the day at 1.3624 followed by a swing area between 1.3599 and 1.3616 as the next downside targets.
This article was written by Greg Michalowski at www.forexlive.com. Source