The CAD rallied yesterday but is currently struggling on profit-taking despite upbeat comments by Bank of Canada’s chief Poloz. However, the coronavirus situation could present some interesting opportunities as it affects the price of oil. With Russia finally on its side, OPEC is currently pressured to enact deeper output cuts to offset the slump in demand caused by the coronavirus outbreak in China – the world’s second-largest oil importer.
Stronger oil prices could lead to a stronger CAD while the USD is set to tumble on profit-taking after noting a rally yesterday on Federal Reserve Chairman Jerome Powell’s testimony which failed to support rate-cut hopes.
We would SELL USD/CAD at a sell stop 1.3245 with SL 1.3320 and TP 1.3160.