After hitting session peaks just above the 1.11 handle overnight, the increasing risk appetite is pushing the USD/CAD to a test of session lows around 1.1070/65.
The recent bullish attempt seems to have run out of legs in the area of 1.1100/10, triggering selling orders to the 1.1060 region so far. The better tone in the risk appetite stemming from the Russia-Ukraine situation was behind the correction lower, boosting the demand for CAD. In the opinion of Stephen Gallo, European Head FX Strategy at BMO, “USDCAD will remain muted in front of the BoC tomorrow and more key data on Friday, with the same general levels dominating the picture: 1.115 capping topside and 1.1025-1.105 acting as a floor underneath”.
As of writing the pair is down 0.11% at 1.1071 with the initial support at 1.1038 (low Mar.3) ahead of 1.1000 (psychological level) and then 1.0962 (daily cloud top). On the flip side, a breakout of 1.1108 (high Mar.4) would expose 1.1148 (high Feb.28) and finally 1.1160 (high Feb.27).