Canadian dollar is best performing currency so far this week among the four majors and three commodity pairs. It has risen 2.4% so far.
- Bank of Canada has kept policy rates unchanged in last night’s monetary policy meeting.
With help of that and higher oil prices, loonie has broken below strong support zone of 1.235-1.24.
Further downfall towards 1.20-1.19 is expected over the coming weeks. However intraday movement of dollar suggests that it is going to be a bumpy ride for Loonie bulls.
How to best use the opportunity then?
Several Canadian dollar poses opportunities with strong fundamentals and lesser bumps from dollar.
- EUR/CAD – Top on the agenda over short to long term. Monetary policies are not diverging in direction but in magnitude. ECB stands more expansionary than loonie. It is a nice opportunity to sell Euro against Canadian dollar. Medium term trade is better to be in for. Pair might decline towards 1.20 from current 1.31.
- GBP/CAD – With this breakout Loonie stands better poised against pound. Moreover strong US economy will be benefiting Canadian economy as a whole. Downside can be played with a stop around 1.86. Currently trading at 1.837. Pair is good for trade as election looms ahead.
- AUD/CAD – Pair is currently trading at 0.955. Another 400-500 pips might come in favor of loonie as RBA will be more expansionary that BOC.
The material has been provided by InstaForex Company – www.instaforex.com