The USD/CAD pair finished with modest gains to 1.4017 from 1.3997 caught between higher Crude Oil prices and dismal economic data. Canada’s Building Permits fell more than forecasts, and while Housing Starts were up, yesterday’s dire IVEY PMI report precedes today’s Employment report, expected to show a contraction of -350,000 Jobs in March from February’s gain of 30,300. Canada’s Unemployment rate is forecast to climb to between 7.2 and 7.4% in March from the previous month’s 5.6%. That’s huge and the Loonie can only get weaker against the US Dollar from here.
We also highlighted that the latest COT/CFTC report saw speculators turn long Canadian bets to +CAD 7,316 from the previous week’s short -CAD 29,245 contracts. For a relatively smaller currency, that’s a huge turnaround of +CAD 36561. If the data tonight comes out slightly worse than forecast, the USD/CAD pair will rocket higher as the Loonie long bets scramble for the exit.
USD/CAD has immediate support at 1.3980 followed by 1.3940. Immediate resistance can be found at 1.4080 (overnight high 1.40816) and 1.4130. Look to buy dips in a likely 1.3990-1.4130 range today.