A Tight Forex Week For The USD/CAD
Shain Vernier • 1 min read
The coming 24-hours are going to be pivotal for the USD/CAD. Several key forex-moving events are scheduled, highlighted by Canadian Retail Sales and a speech from FED Chairman Jerome Powell. In addition, the weekly Baker-Hughes North American Rig Count is slated for release. If the Baker-Hughes report comes in as a surprise, volatility in WTI crude oil may further spike USD/CAD participation.
Thus far, it’s been a quiet week for the Loonie. The four-day range is holding firm at a tight 181 pips ― is this pair poised for a directional move to close the week? Given the news cycle, the USD/CAD has a decent shot of either taking out the high (1.3685) or low (1.3504) of the weekly trading range.
At press time (2:15 PM EST), Bank of Canada (BoC) Deputy Governor Lawrence Schembri has just finished speaking. Schembri gave no hints on further policy moves and placed emphasis on the COVID-19 reopening process. Basically, Schembri’s speech gives forex players a preview of Powell’s Friday engagement. At the moment, the world’s central bankers are in a holding pattern, awaiting more COVID-19 restart data before moving forward.
USD/CAD Brief: Forex Traders Are In No Hurry To Pick A Side
The weekly chart for the USD/CAD is a textbook example of a market in rotation. Rates are consolidating between the 1.3650-1.3500 levels, with a weekly Doji pattern becoming a possibility.
Here are the key levels to watch until Friday’s close:
- Resistance(1): Bollinger MP, 1.3671
- Support(1): 78% Fibonacci Retracement, 1.3327
Overview: For now, a bearish bias continues to be warranted for the USD/CAD. The intermediate-term trend is down, with only the 78% Retracement standing tall as support. Barring a major COVID-19 development or blockbuster statement from Powell, forex rates are likely to chop sideways near the 1.3600 handle for the immediate future.