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USD/CAD Dropped Below Mid-1.3500 - Greenback's Selling Bias Plays 

EagleFX

During Monday's early European trading session, the USD/CAD currency pair failed to stop its previous session, losing streak and dropped below the mid-1.3500 level. However, the currency pair declines were completely sponsored by the emergence of some US dollar selling bias. On the other hand, the weaker oil prices, which tend to undermine the commodity-linked currency, the loonie became the key factors that kept a lid on any additional losses in the currency pair. At this particular time, the USD/CAD currency pair is currently trading at 1.3552 and consolidating in the range between 1.3518 and 1.3566.

Despite the heightened concerns over a second economic lockdown in the US and most of the nation due to the surging number of confirmed coronavirus cases, the broad-based US dollar extended its previous session losses as currency pair's traders were fluctuating between optimism over global economic recovery and worries related to the increasing number of coronavirus cases. However, the losses in the US dollar kept the currency pair lower. Whereas, the US dollar index, which tracks the greenback against a basket of six other currencies, was 0.5% lower and heading toward a two-week low at 96.852.

As per the latest report, almost 15 states of the US have reported a record hike in new cases of COVID-19, which has infected approximately 3 million people in the US and killed about 130,000 so far. Texas registered the record high coronavirus figures for the seven consecutive days. Whereas, the World Health Organization (WHO) reported a record single-day rise of 200,000 in global coronavirus cases. Spain imposed lockdown in the north-western region of Galicia, which fueled the fears of renewed lockdown restrictions.

At the crude oil front, the WTI crude oil prices remain depressed and flashed mixed signals around 40.60 levels, mainly due to the worries over demand recovery triggered by the relentless spread of the coronavirus, which recently overshadowed the optimism about the economic reopening and contributed to the oil losses. However, the losses in the crude oil which undermined the commodity-linked currency – the loonie – and helped limit losses for the pair.

Looking ahead, the traders will keep their eyes on the June month's US ISM Non-Manufacturing PMI, expected 49.5 against 45.4 prior will be key to watch. However, the market would be more active today as US traders return to the desk after a long week comprising Friday's Independence Day holiday.


Daily Support and Resistance

S1 1.3483

S2 1.3521

S3 1.3535

Pivot Point 1.3559

R1 1.3573

R2 1.3596

R3 1.3634

The USD/CAD is trading sideways at 1.3550 level, holding below the 50 periods EMA which is likely to provide support at 1.3490 level. On the lower side, the support prevails at 1.3490 level, and closing of candles below this level can trigger further selling until 1.3400 level while the resistance holds around 1.3623 level today. The RSI is also staying in the selling zone, suggestings that the traders may look for selling trades today. Let's wait for taking a sell position below 1.3580 level today. Good luck!

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