USDCAD Lifts Off Session Lows But Maintains Bear Cycle

• USDCAD moves a little further off session lows as oil slides with OPEC weighing suspending Russia from its oil-production deal, but is still -0.05% at 1.2648 as CAD remains in favour.
• * The cross has recently cleared both the 20- and 50-day EMAs and today sees a clearer break of 1.2660 (61.8% retrace of the Apr5–May12 bull run), opening 1.2562, the 76.4% retrace of the same run.
• * The short-term reaction for tomorrow’s BoC decision is uncertain with the pair increasingly driven by risk sentiment flows although the recent run lower could pave the way for a small bounce in the pair.
• * However, as noted in the MNI BoC Preview some analysts see a constructive outlook for CAD: Barclays see USDCAD grinding lower over the medium-term, ING potential for market instability extending into the summer to keep the pair near 1.27-1.28 before a break below 1.25 in the latter part of the year, and BofA a year-end forecast of 1.23.

Source: Bloomberg