1.3381/1.3425 likely to hold the loonie higher today...

Thanks to a healthy round of buying over in the oil market yesterday, the USD/CAD fell sharply, largely ignoring the better than expected US retail sales reading, and ending the day just ahead of November’s opening level at 1.3419. November’s opening level is interesting. Not only is the number bolstered by a H4 50.0% Fib support at 1.3425, but it is also positioned directly above a daily support at 1.3414, the 1.34 handle, a H4 61.8% Fib support at 1.3387 and a nearby weekly support coming in from 1.3381.

Our suggestions: In view of the collective supports noted above, our desk feels this area (1.3381/1.3425) will very likely hold the market higher today, especially considering that oil is now currently seen trading from a H4 resistance at 45.72.

Seeing as how the above noted buy zone is reasonably large, waiting for a H4 bullish candle to form within the walls of this area is, at least in our book, the more logical route to take. Unless, of course, you’re trading plan allows for large stop losses.

Data points to consider: CAD manufacturing sales at 1.30pm, US PPI data at 1.30pm along with FOMC member Bullard speaking at 9am GMT.