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USD/CAD Breaking Below Triple Bottom - Who's Up for Sell?

EagleFX

The USD/CAD currency pair flashed red and hit the intra-day low to 1.3485 level due to the risk-on bias, which impaired the broad-based U.S. dollar and sent the currency pair lower. As well as, the reason for the losses in the pair could also be attributed to the upticks in the crude oil prices, which underpinned the commodity-linked currency the Loonie and contributed to the currency pair's declines.

Despite the continued rise in the number of coronavirus cases globally and the on-going Sino-American conflict, the market traders cheered the optimism concerning the success of the vaccine backed by the joint efforts of Oxford University and AstraZeneca which showed promising results of a vaccine trial that overshadowed the fears of the ever-increasing numbers of the virus.

As well as, the latest coronavirus (COVID-19) numbers from Texas and L.A. County showed mild reduction in the pandemic figures compared to the recent high statistics, which also favored the risk sentiment and undermined the safe-haven Japanese yen and seemed to extend some support to the pair. While both added a total of 10,564 new cases on Monday, Texas remained the worst affected state with 7,404 addition taking the state-wise total to 332,434. On the flip side, there are 159,045 total cases in L.A. County with the latest extra numbers of 3,160.

Apart from the virus woes. Global markets cheered the European policymakers' agreement over 750 billion Euros of the aid package. It is worth reporting that the regional leaders succeeded in offering 350 billion Euros of loans and the rest as grants after five days of hard negotiations. On the other hand, the U.S. Senators showed their willingness to deliver another package of the stimulus. The resource suggested that the ruling Republican Party was planning to propose $1.0 trillion of an aid package, the opposition Democratic Party prepared a $3.00 trillion worth proposal to call themselves a better ruler.

As in result, the broad-based U.S. dollar has been under pressure on the day. However, the losses in the U.S. dollar could be attributed to the uptick in the U.S. stock futures backed by the multiple factors which kept the currency pair lower. Whereas, the Dollar Index, which measures the greenback against a basket of six other currencies, was down 0.1% at 95.718, having earlier traded at a more than the four-month low of 95.687, at 2:45 AM ET (0645 GMT).

At the crude oil front, WTI crude oil prices took bids around $41 on the day backed by the positive results from three potential COVID-19 vaccine candidates, while upcoming stimulus measures from both the U.S. and Europe also boosted the risk sentiment and contributed to the oil gains. Although the upticks in the crude oil prices underpinned the commodity-linked currency, the Loonie and exerted some downside pressure on the currency pair. The market traders await the Canadian Retail Sales data and the U.S. virus stats for fresh trading impetus on the CAD pair.


Daily Support and Resistance

S1 1.3416
S2 1.3484
S3 1.351
Pivot Point 1.3552
R1 1.3578
R2 1.362
R3 1.3688

The USD/CAD has disrupted the triple bottom support mark of 1.350, and presently, the USD/CAD pair has the potential to drop further unto 1.3460 mark. On the higher side, the USD/CAD can encounter resistance at 1.3500 immediately, which is extended by the 50 EMA (exponential moving average), suggesting the selling trend. Let's consider taking a sell trade below 1.3500 level today to target 1.3460. Good luck!

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