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USD/CAD Gains to Soar Above Mid-1.3500 Mark - Quick Trade Plan! 

EagleFX

The USD/CAD currency pair extended its previous session winning streak during Thursday's early European trading session. They rose above the mid-1.3500 level, mainly due to the broad-based U.S. dollar strength backed by multiple factors. On the other hand, the currency pair gains could also be attributed to the weaker oil prices, which eventually undermined the demand for the commodity-linked currency the loonie and contributed to the currency pair gains. Currently, the USD/CAD currency pair is currently trading at 1.3573 and consolidating in the range between 1.3523 - 1.3589.

Investors seem cautious about the ever-increasing number of new coronavirus cases globally, which fueled the concerns of renewed lockdowns restrictions to control the spread. However, these renewed fears recently overshadowed the prospects for a sharp V-shaped global economic recovery and previous release of positive data from the U.S. and China. However, the gloomy outlook was further bolstered by the fresh report that Australia's Victoria state Premier Daniel Andrews announced a six-week lockdown for Melbourne city. The coronavirus outbreak appeared to be uncontrollable.

Elsewhere, the ratio of hospitalized people in Texas and California raised on the day. A total number of U.S. cases crossed, 2.9 million figures and deaths were reported as 130,000 yesterday, which eventually exerted downside pressure on the risk sentiment and provided support to the safe-haven assets. As per the latest report, Texas cases rose 2.7% v 7-Day Avg. 4.0%, while Texas hospitalizations rose 517 to record 8,698. In the meantime, Florida cases rose 3.2% v 7-Day Avg. 5.1% and California cases rose by record 11,529.

As a result, the market's risk-tone remained mostly directionless as upbeat Chinese equities failed to support the Asian stocks. Moreover, the U.S. 10-year Treasury yields and S&P 500 Futures also printed mild losses by the press time.

At the USD front, the broad-based U.S. dollar extended its previous session bullish moves mainly due to intensifying concerns about the rising coronavirus cases, which urged investors to move their investments in safe-haven assets. The reason behind the U.S. dollar gains could also be associated with the downbeat reports of German industrial production. However, the gains in the U.S. dollar kept the currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.04% to 96.718 by 12:34 AM ET (5:34 AM GMT).

At the crude oil front, the WTI crude oil prices registered 2-day losing streak and remained depressed around $40 marks handle mainly due to heightened concerns over a second economic lockdown in the U.S. triggered by the increased number of confirmed coronavirus cases. However, the pullback in oil prices undermined demand for the commodity-linked currency – the loonie and remained supportive of the USD/CAD pair's ongoing recovery momentum.

In the absence of the major data/events due for release on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. As well as, the JOLTS Job Openings will be key to watch, which is expected 4.85M versus 5.046M.


Daily Support and Resistance

S1 1.3459

S2 1.3499

S3 1.3518

Pivot Point 1.3539

R1 1.3558

R2 1.3579

R3 1.3619

The USD/CAD is trading at 1.3570 after violating the downward channel, which provided resistance at 1.3540 level. Above this, the pair has the potential to go after 1.3590 resistance level. On the 4 hour chart, the pair has closed a candle below 1.3590 resistance level, and it has also formed a bearish engulfing candle, suggesting the odds of selling in the market. Today, we should consider taking a buy trade only upon a bullish breakout of 1.3590 level. Good luck!

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