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Loonie was an underperformer in the course of the past week mainly because of the falling oil prices. USD/CAD rose to 1.3350 as markets got reassured in Donald Trump’s ability to push through his pro-growth policies. The Bank of Canada meeting is now less than 2 weeks away and the policymakers are closely watching the incoming economic data. So far, the figures were upbringing with upbeat consumer confidence report, increase in GDP figures and higher raw material prices. The positive data flow helped to shift the bank’s outlook from dovish to neutral as the BoC’s Governor Stephen Poloz noticed in his recent speech. This makes us believe that the BoC’s policymakers will favor remaining on hold with regard to their monetary policy stance at least this year.
Next week, Canadian dollar watchers will be waiting for the Bank of Canada’s business outlook survey that should shed light on rate hikes timing and the nation’s economic perspectives. On Tuesday, keep in focus Canadian and US trade balance data at 14:30 MT time. The most significant moves in USD/CAD may appear on Friday, as we will get a package of the US labor market data, Canadian employment change and unemployment rate releases. As we saw in the past week, Trump reflation trade is gradually winding down. If Donald Trump manages to push through at least some of his pre-election fiscal policies, it will be a boost for the US dollar. So, we would recommend you to stay tuned for the US political news in order not to overlook substantial moves in USD/CAD. Trump will meet Chinese President Xi Jinping on April 6-7 (Thursday & Friday), so we’ll look forward for more details about America’s trade policy plan. This should be an important driver of the US currency.
On the technical chart of the pair, the prices are consolidating between 1.3280 and 1.3400. The consolidation is taking place within a triangle. On the upside, the immediate resistances can be found at 1.3375 (the upper border of Ichimoku cloud on H4 timeframe) and 1.3415 (March 28 high). 200-period moving average on H4 timeframe serves as support at 1.3300. If bears manage to break the support at 1.3275 (this week’s low), the pair will be vulnerable for decline to 1.3200 and lower.
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