USD/CAD Triple Top Pattern to Drive Selling
The USD/CAD is trading at the 1.3163 level, having violated the support level of 1.3175, which is now working as resistance. On the lower...
The USD/CAD closed at 1.32161, after placing a high of 1.32380, and a low of 1.31341. Overall, the movement of the USD/CAD pair remained bullish throughout the day, with the currency pair dropping to 1.3132 – its lowest level since January – on Monday. It then reversed direction in the late American trading hours, posting gains, thanks to the improved risk sentiment, which helped the USD/CAD pair to gain traction.
During the European trading session, the US Dollar Index (DXY) fell to a daily low of 92.84, because of the risk-on market sentiment. However, in the late session, the DXY gathered strength, rising above 93, and taking the USD/CAD pair with it, onto the upside.
The reason behind the strength of the US dollar is unclear, but it could be attributed to the softening risk sentiment, which was backed by the rise in equity prices across Wall Street, after the news that the American FDA had approved a treatment for coronavirus patients.
On Sunday, the US Food and Drug Administration approved a blood plasma treatment for COVID-19 patients, that uses blood plasma from recovered patients to provide infected patients with antibodies against the virus. However, the approval was only given for emergency cases. It nevertheless raised hopes for quick economic recovery, hence the improved risk sentiment, which helped the USD/CAD pair to gain traction. Another reason behind the increased risk appetite and the surge in the USD/CAD pair was the decline in Crude Oil prices on Monday.
After advancing to a daily high of $ 42.86 on Monday, WTI Crude Oil prices erased a large portion of its gains, making it difficult for the commodity-linked Loonie to find strength against the US dollar. The declining WTI Crude Oil prices weighed on the Canadian Dollar, pushing the USD/CAD pair higher.
On Tuesday, the Corporate Profits for the quarter will be released, and governing council member Schembri will give a speech – this will likely receive the undivided attention of traders. On the US side, the Consumer Confidence, New Homes Sales and Richmond Manufacturing Index will be released on Tuesday, and market traders will be firmly focused on those figures.
Daily technical Levels
Support Resistance
1.3153 1.3260
1.3089 1.3303
1.3046 1.3367
Pivot Point: 1.3196
The USD/CAD is trading at the 1.3163 level, having violated the support level of 1.3175, which is now working as resistance. On the lower side, the pair is likely to find support at the 1.3138 level. The USD/CAD could drop further, until the next support area of 1.3106. The MACD and RSI are also in support of selling, while the 50 periods EMA also suggests a selling trend in the USD/CAD pair. Let’s consider selling below the 1.3178 level today. Good luck!
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