The 1.1100 barrier still remains elusive for the greenback on Monday, with the USD/CAD now losing the grip and testing fresh session lows in the 1.1080/70 band.
After breaking above the weekly consolidation pattern around 1.0900 the figure, spot quickly left behind the psychological mark at 1.10 albeit the bullish momentum seems to have stalled ahead of the 1.11 handle. It will be a very interesting week for the pair, with the FOMC meeting due on Wednesday and the speech by BOC’s Governor Poloz tomorrow – just to mention the most relevant events. According to Shaun Osborne, Chief FX Strategist at TD Securities, “Bull trend momentum indicators are bullishly aligned across a range of timeframes, suggesting limited potential to move lower at this point. We target 1.12 for year-end. We also think broader technical patterns suggest the potential for USDCAD’s rally to extend to the mid/upper teens through mid-2015”.
As of writing the pair is down 0.10% at 1.1078 with the immediate support at 1.1027 (low Sep.12) ahead of 1.0968 (10-d MA) and finally 1.0961 (Tenkan Sen). On the upside, a break above 1.1100 (high Sep.15) would open the door to 1.1106 (high Mar.27) and then 1.1123 (76.4% of 1.1279-1.0620).