The USD/CAD was closed at 1.35739 after placing a high of 1.36857 and a low of 1.35462. Overall the movement of USD/CAD remained bearish throughout the day. The USD/CAD pair struggled to end its bearish track but failed as the WTI Crude oil prices recovered on Monday after the comments from White House. The Chinese poor than expected economic data also played an essential role in maintaining the bearish trend for the USD/CAD pair.
On Monday, the White House adviser Larry, Kudlow said that Donald Trump was not in favor of shutting down of economy again in the wake of the second wave of coronavirus. Instead, he also denied calling the increasing number of emerging coronavirus cases in the United States as the second wave. He said that the number of people checked for infection during a day had been increased 100 times from when it was started.
The positive comments from Larry Kudlow to not impose restrictions once again removed the fears of the re-start of lockdown restrictions in the U.S. due to an increased number of emerging cases. This gave a push to WTI Crude oil prices under pressure from the fears of renewed restrictions. The WTI crude oil went up to $37.24 per barrel on Monday and gave strength to commodity-linked currency Loonie, which weighed on USD/CAD pair.
On the other hand, weaker than expected economic data from China also weighed on the optimism about the V-shaped recovery of the global economy and weighed on the market sentiment. As in result, the USD/CAD pair suffered.
The economic data from the United States favored the U.S. dollar as the Empire State Manufacturing Index in June dropped by 0.2 against the expected drop of 30.0 and supported the U.S. dollar. However, despite the better than expected results, U.S. dollar strength failed to turn the movement of the USD/CAD pair in the reverse direction.
Daily technical Levels
Pivot point: 1.3601
The USD/CAD pair continued following the same direction of downward trend due to increased Crude Oil prices, which overweighed the U.S. dollar strength even after the announcement of new corporate bond purchases by the Federal Reserve. Technically, the USD/CAD pair is trading sideways within a narrow trading range of 1.3665 - 1.3523 level. It seems like the market is waiting for a solid reason to trigger a breakout, and the U.S. retail sales can be that reason. Negative retail sales can trigger a bearish breakout below 1.3523 level and lead Loonie towards 1.3450 and 1.3357 area. Alternatively, the positive retail sales can lead the pair towards 1.3660 level today. Good luck!