USD/CAD plummets to 1.2700 on broad USD weakness

Broad based US Dollar selling has been the key theme until now on Thursday, with the USD/CAD pair now plummeting to 1.2700 handle. 

Investors now seem to fully price-in a win for the 'Remain' camp in the Brexit vote, with the final outcome expected during early hours on Friday. Global optimism seems to move investors away from safe-haven assets, keeping USD bulls on the back-foot. 

Adding to this rising crude oil prices also seems to boost demand for the Canadian Dollar against its US counterpart and is dragging the USD/CAD pair lower. 

Given the optimism surrounding the UK-EU referendum global financial markets run the risk of a sharp reversal should the actual outcome is not on expected lines. Moreover, renewed worries over global supply glut might now hinder a strong bullish momentum for crude and thus restrict any further downslide for the USD/CAD pair.

Technical outlook

A team of analysts at Pia-first notes, “Buying pressure from 1.2742 resulted in all the initial daily selloff being recaptured. Dips continue to attract buyers. A bullish reverse Head and Shoulders is forming. The formation has a measured move target of 1.2960. Further upside is expected and we look to set longs in early trade. Our profit targets will be 1.2960 and 1.3000.”