The Dollar/Canadian Loonie had a relatively narrow trading range for a change although there was high volatility in between. USD/CAD closed on the weak side at 1.4045 from 1.4105 yesterday. Despite the overall stronger US Dollar, Brent Crude Oil prices rebounded off their lows to close at USD 30.80, a gain of 2.31%. The strong performance of risk assets also supported the Loonie.
Bank of Canada Governor Stephen Poloz repeated that the bank stands ready to expand its QE and provide further stimulus should conditions warrant it.
While a base is building in the USD/CAD, the other side of the equation is the US Dollar. With more worrisome data coming from the United States, we could see another dip is this currency pair before higher. USD/CAD has immediate support at 1.4020 followed by 1.3970. Immediate resistance can be found at 1.4100 and 1.4140 and then 1.4170. Look to trade a likely range of 1.3950-1.4200 today. Preference is to buy dips to 1.3950.