USD/CAD Price Testing Support as Sell-Off Gathers Pace

USD/CAD Price, News and Analysis:

• The Canadian dollar continues to firm as risk sentiment improves.
• Technical support likely to be tested as lower highs dominate the chart.

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USD/CAD Pairing Back March’s Sharp Rally

The Canadian dollar continues to gain against the US dollar as global risk sentiment remains positive in the short-term. USD/CAD rose had one of its best month’s in the last three years in March, rallying from around 1.3400 to a peak of 1.4670 before turning lower mid-month. A bounce-back from March 27 is also now being erased as the Canadian dollar looks to this week’s OPEC+ meeting to steady an uneasy oil market. If the OPEC+ delegates can agree on substantial production – with 10 million barrels a day being mooted – the price of oil should move higher, underpinning recent Canadian dollar strength.

The US dollar continues to trim recent gains after a range of Fed liquidity measures satiated a market in desperate need of US dollars. While the greenback remains the global safe-haven of choice, further downside in USD/CAD may be limited.

The daily chart shows the recent downtrend remains in control of price action with USDCAD today touching both resistance and support. As we stand support looks under more pressure than resistance with the recent series of higher lows broken yesterday and today. The pair also closed decisively below the 20-dma yesterday, adding another short-term bearish impulse. A breakout looks increasingly likely as the pair near the apex of the triangle formation. Support seen at 1.4010 ahead of 1.3918 with current resistance off the downtrend around 1.4150.

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USD/CAD Daily Price Chart (September 2019 – April 7, 2020)

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