USDCAD sellers ahead?
The USDCAD tends to see a very weak April. Over the last 15 years, the pair has fallen 12 times between April 01 and April 30. The largest fall was in 2015 with a -5.28% drop.
The USD is weak at the moment as the US 10 year yields have failed to rise despite a good run of recent US data including a strong NFP jobs print last Friday of nearly 1 million extra jobs vs 616K expected.
The CAD has been strongly supported by rising oil markets and an optimistic Bank of Canada whose next move will be to start talking about bond tapering. Last Friday’s strong jobs data is another catalyst for CAD strength. With the USDCAD nestling up towards key resistance on the daily chart last week, this could be a perfect time for USDCAD sellers.
Key Trade Risks:
- Any hint from the US of bond tapering could invalidate this outlook and send the USD pair higher.
- Any sharp falls in the oil markets on rising COVID-19 cases could weaken CAD and also invalidate this outlook.