CANADIAN DOLLAR FORECAST: USD/CAD PRICE DROPS AS LOONIE RECOVERSUSD/CAD rallied 13% off its year-to-date low because the US Green
CANADIAN DOLLAR FORECAST: USD/CAD PRICE DROPS AS LOONIE RECOVERS
- USD/CAD rallied 13% off its year-to-date low because the US Greenback climbed towards its Canadian Greenback peer amid the crude oil worth crash
- Spot USD/CAD worth motion has since pulled again over 300-pips from its latest swing excessive because the Loonie recovers latest draw back
- The US Greenback to Canadian Greenback price has potential to renew its ascent if coronavirus considerations and liquidity strains resurface
The Canadian Greenback, or Loonie, is one of the best performing main forex pair to this point throughout Wednesday’s buying and selling session. Spot USD/CAD is down by about 0.8% as we speak because the US Greenback slides farther from a four-year excessive towards its Canadian Greenback counterpart.
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USD/CAD PRICE CHART: WEEKLY TIME FRAME (SEPTEMBER 2015 TO MARCH 2020)
Regardless of sliding over 300-pips from final week’s blow-off prime, USD/CAD stays larger by about 10% since January, with latest upside pushed primarily by the crude oil worth warfare and demand for safe-haven currencies just like the US Greenback amid the coronavirus pandemic.
| Change in | Longs | Shorts | OI |
| Daily | -7% | 2% | 0% |
| Weekly | -33% | 40% | 11% |
The USD/CAD rally ran out of steam after probing technical resistance close to the 1.4675 worth, which is underpinned by the January 2016 swing excessive. Maybe a wholesome USD unwind is underway as FX volatility ebbs with huge quantities of liquidity being supplied by the Federal Reserve.
USD/CAD PRICE CHART: DAILY TIME FRAME (DECEMBER 2019 TO MARCH 2020)
A every day USD/CAD chart reveals the collection of decrease highs notched over the previous few buying and selling classes and will recommend that the development has began to reverse again to the draw back. Even because the USD/CAD breakout stalls, nonetheless, the newest Canadian Greenback restoration might show short-lived. The Loonie has potential to renew its slide if oil costs stay below strain and coronavirus fallout continues to weigh on market sentiment.
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That stated, USD/CAD would possibly discover technical assist supplied by the 9-day exponential shifting common. Technical confluence across the 23.6% Fibonacci retracement of the forex pair’s year-to-date buying and selling vary might additionally supply buoyancy to identify USD/CAD worth motion. Additionally, a retest of the March 20 intraday swing low close to the 1.42 deal with could also be focused by USD/CAD bears.
— Written by Wealthy Dvorak, Junior Analyst for DailyFX.com
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