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USD/CAD trading in 70-point range since Ottawa shooting - TD Securities

FXStreet (Łódź) - The TD Securities team of experts point out that since the Ottawa War Memorial attack last week USD/CAD has been trading in a 70-point range, around the 1.1240 level.

Key quotes

"Today should be no exception, as a void calendar for Canadian data will provide no domestic catalysts in anticipation of tomorrow’s FOMC meeting outcome at 14.00ET and Governor Poloz’s and Senior Deputy Governor Wilkins appearance before the Senate Banking, Trade and Commerce Committee at 16.15ET. Mr. Poloz’s opening statement and Q&A should provide more background regarding the removal of “neutral” from the BoC’s statement last week, with a message crafted to confirm the overall BoC policy stance remains unbiased."

"Beyond today’s lack of domestic data and the radio-silence ahead of the two key events tomorrow, soft oil prices continue to exert a dampening influence on CAD. Both the fundamental position—abundant supply relative to demand—and the technical position—pressure on monthly support just below $81/bbl—of the crude oil market suggests that risks to prices are biased to the downside."

"Lower oil prices are a drag on the CAD and, as our correlation matrix, above, highlights, crude prices are a strengthening influence on the CAD relative to last month and the last quarter. The daily correlation (based on rolling one month window of daily returns) remains relatively weak, however, and while a deeper dip in crude prices would be a near-term negative for the CAD, we don’t think it would add much momentum to a market that has basically stalled."

"On the charts, USDCAD looks soft this morning below the daily channel base at 1.1240 but the short-term pattern suggest that weakness to the 1.1155/65 area could be seen and the picture would still suggest consolidation. Last Thursday’s low at 1.1189 may underpin funds near-term. Resistance is 1.1250 intraday."

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