USD/CAD News & Analysis: Resurgence Above 1.3400.
USD/CAD returns above the 1.3400 level, Amid a diminished market sentiment and declining oil prices.
FUNDAMENTAL OVERVIEW:
- Weakened market sentiment is boosting the US Dollar.
- Declining oil prices are adding downward pressure on the CAD.
- The Loonie may find support later today from Canada’s business outlook and manufacturing sales data.
In Monday’s European session, the US Dollar is making a resurgence. A shift to a more negative market sentiment, marked by equity markets turning negative after an initially positive opening, along with lower oil prices, is driving upward momentum for the pair.
Investors appear to have absorbed Friday’s weaker-than-expected US PPI data, as the Greenback strengthens in a subdued trading session. With a light economic calendar and US stock markets closed for bank holidays, trading is characterized by choppiness and volatility.
Oil prices, a key export for Canada, continue to retreat from Friday’s highs above $75, exerting downward pressure on the Canadian dollar.
The Bank of Canada’s Business Outlook Survey and Manufacturing Sales data later today may provide some support for the CAD.
Attention shifts to Canadian CPI on Tuesday for insights into the BoC’s monetary policy. In the US, focus turns to Wednesday’s Retail Sales and Friday’s Michigan Consumer Sentiment Index.
Technically, the US Dollar appears to be gaining bullish momentum, targeting 1.3455, the 61.8% retracement of the December sell-off, with key resistance levels at 1.3480 and 1.3545 and supports at 1.3375 and 1.3335.
USD/CAD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
USD/CAD is currently trading within an up channel.
USD/CAD is positioned above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 1.3427
Immediate support level: 1.3342
HOW TO TRADE USD/CAD
After a notable upward surge, USD/CAD encountered resistance, leading to a decline and adopting a downward channel with lower lows. Presently, it has found support, initiating an upward movement. The pair is currently hovering around a significant resistance level, and a breakthrough could signal further upside potential.