USD/CAD Tests Weekly Downside Support

Posted Monday, June 1, 2020 by
Shain Vernier • 1 min read

The June trading month is off and running, with investors choosing to forego the USD in favor of other assets. Subsequently, the Greenback is off across the majors, specifically against the euro EUR/USD  GBP GBP/USD, and CAD (USD/CAD). For now, it looks like traders are betting that the USD is due to relinquish its COVID-19 safe-haven status.

Aside from the U.S. riots, the key financial story of the day has been the strength of commodities. To open June, gold futures are trading above $1740.0 and WTI crude oil is holding firm north of $35.00. Given the robust performance of these assets, the commodity dollars are performing well against the Greenback. One of the biggest movers has been the USD/CAD, which is testing several key downside support levels.

WTI Firm, USD/CAD Tests Weekly Support

In a Live Market Update from last week, I issued a buy recommendation for the  USD/CAD  from weekly downside support. At the moment, the trade is taking some heat as bears are piling on to the intraday downtrend.

USD/CAD, Weekly Chart
USD/CAD, Weekly Chart

Here are the key levels to watch for the remainder of the session:

  • Support(1): Bollinger MP, 1.3636
  • Support(2): 62% Fibonacci Retracement, 1.3607

Overview: As the June trading month gets underway, there are many questions facing the financial markets. However, the COVID-19 economic reopening appears to have restored order to the WTI crude oil market. In turn, the USD/CAD is falling and on the verge of correction. If the 62% Fibonacci Retracement fails as downside support, be ready for a swift drop to the 1.3500 psychological level.

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