USD/CAD Posts First Winning Week In Two Months - Forex News by FX Leaders

USD/CAD Posts First Winning Week In Two Months

Posted Friday, September 11, 2020 by
Shain Vernier • 2 min read

For the first time in two months, the USD/CAD is poised to close the week in the green. Rates are in the neighborhood of 1.3200 following a dovish Bank of Canada (BoC) policy announcement and stronger-than-expected U.S. CPI. As we move into fall seasonality for WTI crude oil, one has to wonder if 2020’s bottom is in for the USD/CAD.

It’s Friday and that means the Baker-Hughes U.S. Rig Count has been released to the public. This week’s number came in at 180, down from 181 last week. All in all, U.S shale is in consolidation; but, the contraction may have bottomed. 180 has been a common figure over the past month of rig counts ― right now drillers are in a holding pattern. Be on the lookout for this number to move lower as North American crude oil producers begin preparation for the winter months.

This week has been a good one for those long the USD/CAD. Let’s dig into the weekly technicals and take a closer look at this market.

USD/CAD Closes The Week In The Green

Green weekly candlesticks have been hard to come by for the USD/CAD. This week is shaping up to be the biggest five-day gain since June for the Loonie. While still well off of COVID-19 panic highs, this pair appears to have found solid ground in the vicinity of 1.3000. 

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

Overview: Despite the short-term buying, the long-term bearish trend in the USD/CAD remains valid. Until we see rates establish a foothold above 1.3200, this market is still ideal for shorting. However, fading WTI prices and weak Canadian economic fundamentals make ruling out a bullish move out of the question.

Holiday-shortened trading weeks are always difficult to manage. Hopefully, yours was a good one, filled with green pips. If not, be sure to check in ahead of next Monday’s action for analysis, insights, and signals designed to boost your forex P&L.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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