The Canadian Dollar went looney, plunging to 1.40694 lows overnight from an overnight high at 1.43492 before settling to 1.4080. In early Sydney, USD/CAD dropped sharply to 1.4011 before bouncing back to its current level of 1.4080. What a wild ride, what a Loonie!

The Oil sensitive Canadian Dollar gained versus the US Dollar as Oil prices stabilised and the Dollar Index dipped. However, the USD/CAD will find it tough to break through the 1.4000 psychological level. Global growth and oil prices will remain weak. Technically, expect the 1.4000 level to hold unless we see extreme weakness in the US Dollar.

For now, the USD/CAD looks likely to trade in a band between 1.40 and 1.4300. Immediate support lies at 1.4030 and 1.4000. Immediate resistance can be found at 1.4130 followed by 1.4200. The latest Commitment of Traders/CFTC report for the week ended 24 March saw net speculative Canadian Dollar shorts increased to -CAD 29,245 from -CAD 9,623. This should keep USD/CAD topside to 1.43-1.45. Look to trade a likely 1.4030-1.4230 range today. Prefer to buy dips down at current levels.