Formally, this is a signal in favor of purchases of the Canadian dollar , including against the US dollar . But we believe that even if growth will take place, it will be limited. This is due to both technical and fundamental factors.
Technical support of 1.30 is a powerful level to stop the sellers of the USDCAD pair. As for the technical indicators, they are generally neutral and ready for any development of events.
Analyzing the fundamental background, we note that the main threat to the Canadian currency is Trump's trade wars, where Canada, is also involved. And since the United States is Canada's key trading partner, this factor is very important.
The factor of trade wars is very likely to be considered by the Bank of Canada. "Pigeon" comments on the need to further assess the appropriateness of further raising rates in the uncertainty of the outcome of trade wars are very likely.
And finally, a small impression of the actual market sentiments: according to the CFTC speculators are increasing up short positions in the Canadian dollar .
In total, our recommendation is to look for purchases of the USDCAD pair, especially if it drops to 1.30. If this support will be taken, you can turn over to selling the pair with targets at the bottom of 1.25, especially if there will be fundamental reasons for this in the form of aggressive rhetoric of the Bank of Canada. Otherwise, from 1.30 a pair needs to be bought. As for the targets of purchases, they are in the area of 1.34-1.35.