The Canadian dollar has been one of the most active major currencies as of late. CAD is considered a commodity currency and tends to swing along with crude prices as the Canadian economy relies on its big oil sector. Ongoing pullback on the oil market should weaken CAD and therefore put upward pressure on USDCAD. However, the pair has been moving lower over the past 2 days, signaling that CAD is strengthening. The Canadian dollar is one of the major currencies to watch this afternoon as a labor market report for February from the country will be released at 1:30 pm GMT. Market expects a 160k increase in employment, following the previous month's drop (-200k), and a decline in unemployment rate from 6.5 to 6.2%.
Taking a look at USDCAD chart at D1 interval, we can see that the pair tested the upper limit of an ascending triangle pattern earlier this week in the 1.2900 area but failed to break above. In case the ongoing pullback continues, a test of the mid-term support in the 1.2630 area cannot be ruled out. Note that lower limit of the aforementioned triangle pattern can be found slightly below 1.2630 area. A break below this hurdle could pave the way for a deeper downward move.
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Source: xStation5
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