recent moves in oil added strength to CAD what moved the pair to about 0.9820. Oil move was dramatic (from high $80's to just above $100) and this pair did not gain as much, and the reason for that is that market participants that Canadian dollar is just getting too strong. Members of Royal Bank of Canada are getting very concerned about currency strength, because it might hurt recovery that is taking place in Canada. With strong currency BOC has no need to raise interest rate, and we think that market is realizing that. In the case of more turmoil USD is still the safest bet, so we will go long at 0.9820. Divergence is clear on daily chart and we should target 50 simple moving average as the first target.
Market had many excuses to push this pair lower, but decided to pass on it. In case of stabilization in Libya, we expect strong move up, and sharp drop (profit taking) in oil, as well as in CAD.
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