USD/CAD Breaks Out as Momentum Gains Traction

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Following recent volatility, USD/CAD stabilized in early trade, moving inside a narrow band on either side of 1.3300 ahead of the North American open. The pairing was capped just under 1.3352 overnight. Since then, the modest recovery in oil prices supported the CAD, as has a much-improved risk backdrop, at least compared to Monday. Yields in the U.S. moved higher on Tuesday allowing the greenback to gain traction against the Loonie.

The Bank of Canada’s Schembri downplayed the risks posed by housing to financial market stability, saying that macro-prudential housing policy has contributed to a high degree macroeconomic and financial stability. He pronounced the risks stemming from the rise in household imbalances have been well managed by macro-prudential policies.

The USD/CAD currency pair broke out above 1.32 and is now on tract to test the highs last seen in 2004 at 1.3950. Momentum on the currency pair has turned positive with the MACD (moving average convergence divergence) index generating a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.

The post USD/CAD Breaks Out as Momentum Gains Traction appeared first on Forex Circles.

Source:: USD/CAD Breaks Out as Momentum Gains Traction

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