Historically and economically, the Canadian dollar has tracked energy commodities (oil) and interest-rate differentials far more closely than the price of gold. Oil carries significant weight in Canada's exports and trade balance, so moves in crude prices feed directly into the CAD. Gold is quoted in USD on international markets. When the price of gold rises, it does not necessarily imply an appreciation of the CAD: it depends mainly on the behaviour of the USD and on global risk sentiment. The gold-CAD link is therefore indirect and unstable. If you are interested in the CAD, it is more useful to watch oil prices, where there is a direct correlation.
From a technical perspective, WTI crude is hovering near a floor of around $55-$56 a barrel. A sustained rebound from this area could therefore support the Canadian dollar over time. Against the US dollar, it has hit resistance around 1.4150, but only a break below 1.3835 would genuinely confirm a trend reversal. Conversely, against the euro, key support lies close to current levels at 1.6155, bearing in mind that EUR/CAD has also reached significant targets around 1.6370/6400. Thus, a break of this support could be used to initiate short positions (bullish CAD). Be careful, however: this is a purely directional trade. You will not be able to benefit from the interest-rate differential in a carry-trade strategy, as the spread between them is too narrow.
Elsewhere, EUR/USD continues to trade above 1.1500/1480, the key level that needs to be broken to confirm a bearish reversal for the euro against the dollar. The Japanese yen continues to slide against the dollar and is heading towards its previous highs at 158.88/160.35. Key support is at 155.00. USD/CHF is still in a holding pattern between 1.8130 and 0.7830. A break above resistance, ideally coinciding with a move below 1.1480 in EUR/USD, would confirm the bullish dollar scenario. The Aussie and the kiwi remain under downside pressure as long as they hold below 0.655 and 0.5680 respectively. Downside targets are at 0.6350/6310 and 0.5500/5485 respectively.
