The Canadian dollar is the top-performing G10 currency today as it plays catch-up to the positive momentum in risk assets this week.
USD/CAD is down 56 pips on the day to 1.4005
The drop brings some notable levels into play, starting with the big figure. Below that are a pair of recent lows at 1.3990 and 1.3982. In terms of the technicals, the 1.3982 level was also precisely the 38.2% retracement level from the May-June rally.
If that cracks, I would highlight the 50% retracement at 1.3899 as a target or even 1.3817, which is the 61.8% retracement. On the fundamental side, the Canadian economy posted strong Q2 GDP numbers and that’s led to something of a snapback but the bigger picture is more important. The market is feeling better about global growth and the sustainability of AI capex.