The decline of the USD/CAD gives us a buying opportunity as the central bank of Canada (BoC) seems less eager to tighten its monetary policy.

While the institution notes that Canadian exports are struggling to recover due to foreign demand contained and the strength of its currency, the central bank of Ottawa has once again opted for a status quo in March. The main interest rate remains at 1% since September 2010.

Accustomed to trade surplus, the trade balance is struggling around equilibrium since late 2008, even showing a deficit for nearly two years. Despite the good orientation of the labor market since September 2009, the country's economy shrank at the Q4 last year (-0.2%), which shows consequently a sluggish growth +0.6% over one year.

At the moment, the activity of its U.S. neighbor shows signs of strength, which could prompt the Federal Reserve to slowdown its assets purchases. The institution will hold its next meeting on 19 and 20 March, after which Ben Bernanke will give a press conference awaited by the markets.

Finally, according to experts, the resignation of BoC Governor, Mark Carney, who is leaving on June 1 to manage the Bank of England on July 1 will not affect the policy of the Canada's monetary authority, which relies more on a committee than just one man.

Technically, profit taking consecutive of U.S. Dollar's rally lead the parity in contact with our CAD 1.0165 support. We take the opportunity to buy at an attractive price, between this level and 1.02, with a stop-loss below CAD 1.0080 and an objective around CAD 1.05.