The Canadian dollar trades towards the lower end of its 2021 range versus the U.S. dollar, but fresh gains could be in the pipeline.
Taper speculation surrounding the Bank of Canada's bond buying and the oil price running at a high point since the pandemic could feed through to a higher CAD. nL1N2K81VAnL1N2KB097 Those factors, added to the growth recovery potential both from the U.S. stimulus measures and global vaccine rollout, should help underpin commodity currencies.
Technically, the CAD is resisting further losses and USD/CAD has been unable to maintain daily Ichimoku cloud breaks.
A thick and falling cloud has contained the price since the Jan.
21 to Jan.
28 rally and provides resistance at 1.2814.
Given the combination of positive externalities and potential for a change of direction for the BOC, the loonie could return to levels around 1.2600 or even to the April 2018 highs of 1.2530.
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USD/CAD daily Ichimoku chart: Click here