USD/CAD Stalls, GBP/CAD & NZD/CAD Soar

CANADIAN DOLLAR PRICE OUTLOOK: USD/CAD SELLOFF SUBSIDES AS GBP/CAD & NZD/CAD EXPLODE

• USD/CAD promoting strain stabilizes because the Canadian Greenback edges decrease with crude oil costs
• GBP/CAD value motion rocketed greater on Wednesday largely due revived Brexit negotiations
• NZD/CAD has potential to increase even greater if key financial knowledge due for launch permits

The Canadian Greenback got here beneath fireplace throughout Wednesday’s buying and selling session. Loonie weak spot appears to be like partly pushed by disappointing Canada retail gross sales launched within the morning, which crossed market wires with a 0.4% month-on-month enhance for August in comparison with the 1.1% rise anticipated and 0.6% acquire reported beforehand. A notable drop in crude oil costs might broadly clarify Canadian Greenback draw back as nicely owing to their usually robust inverse correlation. A pause to the sharp slide set forth by USD/CAD value motion not too long ago additionally appears to observe comparatively extra tepid US fiscal stimulus hopes.

USD/CAD PRICE CHART: DAILY TIME FRAME (03 JUL TO 21 OCT 2020)

USD/CAD caught a bid after colliding with the 1.3100-price degree. This space of technical confluence is underpinned by final week’s low along with the 76.4% Fibonacci retracement of September’s buying and selling vary. USD/CAD may need slightly extra room to increase its aid bounce, however a bearish trendline prolonged by way of the collection of decrease highs notched this month might undermine rebound potential. The 1.3200-handle additionally stands out as an intimidating zone of technical resistance.

Though, eclipsing this technical barrier, maybe catalyzed by a breakdown in US fiscal stimulus talks, might open up the door for USD/CAD bulls to make a fast push towards the 1.3400-price degree. Alternatively, dropping beneath the 1.3100-mark once more would possibly point out a resumption of USD/CAD promoting strain with the 31 August swing low standing out as a possible draw back goal.

GBP/CAD PRICE CHART: DAILY TIME FRAME (01 JUN TO 21 OCT 2020)

GBP/CAD value motion ripped greater on Wednesday in giant due to revived Brexit negotiations. A constructive response by the Pound Sterling to the newest Brexit growth helped ship spot GBP/CAD on a 275-pip surge to the strongest degree in three-weeks. GBP/CAD now trades again above its 200-day easy transferring common, which might open up the door to bullish continuation.

This may be facilitated by Bollinger Band width enlargement as was witnessed late July. That mentioned, month-to-month PMI experiences due for launch later this week might bolster the Canadian Greenback relative to its Pound Sterling peer if the main indicator highlights a marked deterioration in UK financial exercise amid the reimplementation of stringent coronavirus tips.

NZD/CAD PRICE CHART: DAILY TIME FRAME (21 MAY TO 21 OCT 2020)

NZD/CAD costs additionally jumped on Wednesday because the Kiwi pivoted greater in opposition to the Canadian Greenback. The 200-day easy transferring common offered a springboard for NZD/CAD value motion as soon as once more because it has a number of occasions this 12 months. Constructive divergence steered by the MACD indicator factors to a different encouraging technical growth for NZD/CAD bulls.

The 50-day SMA would possibly thwart a sustained advance, however surmounting this barrier of resistance might clear the way in which for NZD/CAD to increase greater towards its negatively-sloped trendline connecting the 31 July and 18 September swing highs. That mentioned, the DailyFX Financial Calendar particulars high-impact occasion danger on the docket posed by the upcoming launch of New Zealand inflation knowledge, which has potential to strong-arm the path of NZD/CAD.

— Written by Wealthy Dvorak, Analyst for DailyFX.com

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