Canada’s economy without any doubt is in a recession at the moment. This might last longer till first quarter of 2016 because of prolonged low oil price. Energy export occupies a large proportion of Canada’s net export which serves as a major revenue for the economy, this explains why low oil price will always have a strong impact on the Canadian dollar.
Later today, the Bank of Canada will take another vote on interest rate decision according to forecast, we do not expect to see any move from the bank of Canada but the governor’s speech thereafter might have some impact t on USDCAD. He is most likely to talk down the Canadian dollar because he wants a weak currency at this time of recession so as to stimulate growth.
Technically, USDCAD bounce off from a good support level today at exactly 1.31840 during the London opening (8:00 AM). This is a bullish move that will go all the way to test the 1.33 levels and eventually 1.350. This might take a couple of weeks but it will hit the target as long as we trade above the 1.3156 support level.