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Loonie bulls and bears were all over the place last week after pricing in an upbeat BOC and their Keystone XL pipeline concerns.

Will we see one-directional moves this time?

Let’s check out the catalysts that can affect CAD’s price action:

Low-tier economic releases

  • Building permits (Jan 28, 1:30 pm GMT) to plummet by 10.0 after a 12.9% bounce in November
  • Monthly GDP (Jan 29, 1:30 pm GMT) expected to remain at 0.4% in November
  • A better-than-expected GDP release would support BOC Gov Macklem’s view that the economy doesn’t need additional stimulus for now

Crude oil updates

  • With not a lot of domestic data to watch, Loonie traders could pay more attention to crude oil prices (Canada is the fourth-largest oil producer)
  • Recall that Biden nixed the 12-year Keystone XL pipeline project that would’ve carried 830,000 barrels/day from Alberta to Nebraska AND executed a 60-day suspension on new oil and gas leasing permits

Market risk appetite

  • Rising COVID-19 cases and variants and their impact on lockdown prospects (and economic activity) can affect the demand for the high-yielding, oil-related Loonie
  • More profit-taking from the previous weeks’ risk-taking can drag the Loonie against its lower-yielding counterparts

Technical snapshot

  • Stochastic is showing the Loonie approaching overbought levels against most of its counterparts
  • CAD is in “oversold” territory against GBP on the daily time frame
CAD Forex Pairs Stochastic from MarketMilk
CAD Forex Pairs Stochastic from MarketMilk
  • SMAs show CAD seeing short-term bearish pressure across the board
  • It remains above the 20, 50, and 200 SMA against the safe-havens
  • The Loonie is still in short and long-term daily bearish trends against the comdolls and the pound
CAD Forex Pairs SMAs from MarketMilk
CAD Forex Pairs SMAs from MarketMilk
  • CAD saw the most volatility against the European currencies and the dollar in the last seven days
CAD Forex Pairs Volatility from MarketMilk
CAD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read CAD’s price recap for Jan. 18 – 22!