USD/CAD: Zoning in on Parity

The Canadian dollar has been on a tear. In the past six months, the currency has made new 30 year highs after appreciating over 12 percent against the US dollar, putting parity within reach. At the beginning of the year, an exchange rate of 1.0 for USD/CAD seemed like a far fetched target, but now it has become a realistic and very probable one. Even though sentiment has become very one-sided and technicals indicate that the currency pair is extremely oversold, there is no major support until parity. With the risk of a global slowdown, record high oil prices and a resilient economy is behind the strength of the Loonie.