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Loonie bulls and bears were all over the place last week after pricing in an upbeat BOC and their Keystone XL pipeline concerns.
Will we see one-directional moves this time?
Let’s check out the catalysts that can affect CAD’s price action:
Low-tier economic releases
- Building permits (Jan 28, 1:30 pm GMT) to plummet by 10.0 after a 12.9% bounce in November
- Monthly GDP (Jan 29, 1:30 pm GMT) expected to remain at 0.4% in November
- A better-than-expected GDP release would support BOC Gov Macklem’s view that the economy doesn’t need additional stimulus for now
Crude oil updates
- With not a lot of domestic data to watch, Loonie traders could pay more attention to crude oil prices (Canada is the fourth-largest oil producer)
- Recall that Biden nixed the 12-year Keystone XL pipeline project that would’ve carried 830,000 barrels/day from Alberta to Nebraska AND executed a 60-day suspension on new oil and gas leasing permits
Market risk appetite
- Rising COVID-19 cases and variants and their impact on lockdown prospects (and economic activity) can affect the demand for the high-yielding, oil-related Loonie
- More profit-taking from the previous weeks’ risk-taking can drag the Loonie against its lower-yielding counterparts
Technical snapshot
- Stochastic is showing the Loonie approaching overbought levels against most of its counterparts
- CAD is in “oversold” territory against GBP on the daily time frame
- SMAs show CAD seeing short-term bearish pressure across the board
- It remains above the 20, 50, and 200 SMA against the safe-havens
- The Loonie is still in short and long-term daily bearish trends against the comdolls and the pound
- CAD saw the most volatility against the European currencies and the dollar in the last seven days
Missed last week’s price action? Read CAD’s price recap for Jan. 18 – 22!
