- AUD/CAD is extending spike for 2nd successive session, trades 0.54% higher on the day.
- Dismal Canadian building permits data and NAFTA setback weighed heavily on the Canadian Dollar.
- Reuters reports mentioning that Canadian authorities were increasingly convinced that President Trump will announce US withdrawal from NAFTA sent the CAD tumbling.
- Focus now on the Bank of Canada meeting next week. Markets have firm expectations for a BOC interest rate hike move next Wednesday.
- OIS is pricing an 87% chance of a hike for next Wednesday’s policy decision.
- Technically, the pair has broken channel top at 0.9855, raising scope for further upside.
- 200-DMA offers stiff resistance at 0.9910, breakout will confirm further upside.
Support levels - 0.9855 (channel top), 0.9812 (20-DMA), 0.9794 (5-DMA)
Resistance levels - 0.9910 (200-DMA), 1.00, 1.0052 (61.8% Fib retracement of 1.0345 to 0.9579 fall)
Recommendation: Watch out for break above 200-DMA to go long, target 1.00/ 1.0052
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