Looking ahead, energy prices will be a key factor of additional Canadian dollar strength. Analysts say if energy prices hold near current levels or strengthen, it will likely translate into further Canadian dollar gains vs. the greenback.
Most analysts expect the USD/CAD to retest the September low of $1.1586 before year-end. Ideaglobal’s Powell saw potential toward the $1.14 area by year-end. Mazanec reiterates a long-held market adage: “You never really want to go against the trend, until the trend is broken.”
He points to the $1.1950 level as key resistance to watch on the upside for the USD/CAD.
“A close above that level might give us a signal that a low is in,” he concludes. Conversely, a push back under $1.1650 and “traders would start looking for $1.1200.”
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