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Buying the Pullback in USD/CAD at MAs

The USD dollar has been bearish against most major currencies, especially since the middle of November, but it has been making gains against the Canadian Dollar, which shows that this currency has been even weaker during this period. As a result, USD/CAD gained nearly 500 pips, also being pressed down by the bearish momentum in crude Oil, with US WTI falling to $71.12 just a while ago. This pair touched 1.37 yesterday and then retreated lower, but the 50 SMA (yellow) turned into support and the price bounced back up from there.

Today we are seeing another pullback lower as the USD weakness resumes, but another moving average is acting as support now. The price has formed a couple of doji candlesticks at this moving average which are bullish reversing signals after the pullback, so we decided to open a buy USD/CAD signal here, hoping for another bounce.

We saw a jump in crude Oil earlier today after news that TC Energy shut down the Keystone pipeline due to pipeline leaks in Nebraska. WTI crude jumped from $72.50 to $75.50 but reversed back down immediately and fell to $71.10s, which indicates that the pressure remains to the downside in crude Oil and it will help push USD/CAD higher.

Weekly US Initial and Continuing Jobless Claims

US initial jobless claims

  • Weekly initial unemployment claims 230K vs 230K expected
  • Prior week jobless claims were 225K
  • Four-week moving average vs 227.0K last week
  • Continuing claims 1671K vs 1600K expected
  • Prior continuing claims 1608K

USD/CAD Live Chart

 

USD/CAD

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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