Forex Flash: USD/CAD may drop on Fed Bernanke's testimony – TD Securities

More than headlines coming from Italy, the main pressure for the CAD is soft domestic fundamentals that have considerably disappointed recently. “Yesterday’s acknowledgement by Governor Carney only added to sentiment extending USD/CAD gains to fresh 2013 highs”, wrote analyst Shaun Osborne and Greg Moore, pointing to Bernanke’s testimony today has potentially CAD positive as Fed's Chairman is expected to downplay the notion of the impending end of QE. “However, Friday’s Canadian GDP report should reinstill the negative CAD theme”, they added.

"We are still bullish on USD/CAD in the coming weeks but Bernanke’s potentially CAD-positive comments could provide a brief pullback", they wrote, pointing to 1.0100 as support and a potential extension higher after a clean break above the 1.0270/80 area.