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CAD: Potential buy at attractive levels if Oil bounces

FXStreet (Bali) - The main theme in the market on Thursday was the collapse in Oil prices, sliding from $73+ down towards $67.50, dragging with it a battered Canadian Dollar.

On that CAD fall, there is an interesting case to be made, as market chatter is growing that the latest $6 sell-off in Oil was a classic capitulation, usually signaling that a potential bottom might be near. There was little hope that OPEC members would strike a deal on oil production cuts on the lead-up to the event, suggesting that most of the negative news were already priced in. If one throws into the mix improved CAD fundamentals, as seen in latest indicators - including inflation pressures -, the case to stay alerted for potential buying opportunists in the Canadian Dollar is quite compelling.

Looking at the G10 FX space, the Loonie may have its best chances to appreciate mid term against usual suspects - EUR, JPY - given Central Bank policy divergences, while any further weakness in the EUR and JPY will probably make the USD resilient, leaving the AUD and NZD quite vulnerable too.

AUD/JPY pressured towards downside on 100 handle

AUD/JPY is trading at 100.43, down -0.22% on the day, having posted a daily high at 100.74 and low at 100.39.
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