The Canadian Dollar tested first support of 1.3071 (0.7650) overnight after the liberals under a Trudeau regime were re-elected to a minority government. The liberals will be required to get the support from other political parties to pass any legislation. The Loonie remains bullish this morning, and support can now be seen at 1.3029(0.7675).
The Loonie has gained 250 pips over the past month, mainly on broad USD selling due to weak economic data south of the border. Also, offering support to the Loonie is the easing in the trade war between China and the United States. Canada is a commodity-based country, and an easing in trade tensions adds to the demand for these exports. Resistance for the Canadian dollar can be seen at 1.3114 and 1.3157. A softening move in the currency would be triggered on two issues still grappling markets. A breakdown of China/U.S. trade talks and Brexit, both would signal equity profit-taking. Selling equities usually boosts U.S. treasuries, which strengthens the greenback.
At 8:30 am today, Statistics Canada will release Canadian Retail Sales.