CANADIAN DOLLAR OUTLOOK: USD/CAD BULLS DEFEND 1.3000-PRICE LEVELUSD/CAD bears have struggled to keep up promoting stress over the
CANADIAN DOLLAR OUTLOOK: USD/CAD BULLS DEFEND 1.3000-PRICE LEVEL
- USD/CAD bears have struggled to keep up promoting stress over the past two buying and selling classes
- USD/CAD value motion is ricocheting larger off a important technical help degree round 1.3000
- Canadian Greenback power is simmering despite the fact that crude oil costs proceed to realize floor
Canadian Greenback bulls appear to be taking a breather and easing off the bid in the meanwhile. This follows USD/CAD value motion trying to stabilize and claw again latest draw back for the reason that sharp 400-pip plunge to begin the month. The reduction bounce at the moment being staged by USD/CAD seems to coincide with rebound off technical help supplied by the 1.3000-price degree. This important zone of technical confluence round 1.3000 is underpinned by the 2019 yearly closing degree in addition to the swing low printed on 31 August.
Really useful by Wealthy Dvorak
Foreign exchange for Rookies
USD/CAD PRICE CHART: DAILY TIME FRAME (15 MAY TO 11 NOV 2020)
USD/CAD briefly pierced this space of buoyancy earlier this week on an intraday foundation because the Canadian Greenback surged with crude oil costs, however the transfer lacked follow-through and correspondingly appears to be like to have fashioned a hammer candlestick. A hammer candlestick on the finish of a downtrend can point out a bullish reversal lurks on the horizon. That mentioned, this might open up the door for USD/CAD to increase its rebound try as Canadian Greenback power fizzles out after failing to take out the important thing technical barrier across the 1.3000-price degree. This brings support-turned-resistance highlighted by final month’s lows into focus as a possible topside goal earlier than the 1.3200-handle and 100-day easy shifting common are thought of.
| Change in | Longs | Shorts | OI |
| Day by day | 16% | -6% | 12% |
| Weekly | 76% | 28% | 66% |
To that finish, a pullback in crude oil costs from present ranges may assist facilitate the transfer larger by USD/CAD. That is contemplating the sturdy constructive correlation between crude oil and the Canadian Greenback usually noticed. Then again, with market sentiment enhancing and the reflation commerce gaining traction, which largely follows evaporating US election fears and inspiring COVID-19 vaccine headlines, crude oil and the Canadian Greenback may stay in demand extra broadly. This would possibly current headwinds to USD/CAD value motion in flip, notably if dealer threat urge for food retains the US Greenback slowed down given its posturing as a high safe-haven forex.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception