The USD/CAD prices were closed at 1.39431 after placing a high of 1.39691 and a low of 1.38662. Overall the movement of the USD/CAD pair remained bullish throughout the day. The USD/CAD pair extended its losses on Tuesday and moved below its lowest since last April, at 1.3872. The broad-based selling pressure on the US dollar made the pair to drop for the second straight day. However, pair managed to close its day with a slight bullish candle after recovering its daily losses.
The monthly data from the United States about Housing Starts showed a decline in April to 0.89M against the expected 0.95M and weighed on the US dollar. In April, the Building Permits increased in the US, but investors ignored this news and continued selling the US dollar. The Chairman Jerome Powell of Federal Reserve and Steven Mnuchin, US Treasury Secretary, viewed the role of Treasury and Fed in supporting the economy during coronavirus pandemic.
The US drugmaker Moderna reported positive results for its potential COVID-19 vaccine on Monday, which raised the risk sentiment in the market and weighed on the US dollar. The risk appetite drove the US dollar on the downside against its rival currencies like CAD and drove the USD/CAD pair to its two weeks lowest level.
On the other hand, the WTI Crude Oil, which gained almost 20% in the last three days, was dropped on Tuesday to make a technical correction. The daily loss in crude oil by 1.5% weighed on commodity-linked Loonie, which struggled to preserve its strength against the US dollar and limited the downfall of USD/CAD. On the data front, the US dollar was supported by the Building Permits report, which rose to 1.07M against the forecasted 1.00M. However, the Housing Starts were declined during April by 0.89M against the expected 0.95M and weighed on the US dollar to further put pressure on the USD/CAD pair.
Daily Technical Levels
Pivot Point: 1.3924
The USD/CAD is now likely to find support around 1.3869 level, and closing of candles above 1.2859 level may drive bullish bias in the pair, and it may trigger buying until 1.3987 level. Conversely, a Bearish breakout of 1.3859 level may lead to USD/CAD prices further lower than at the level of 1.3730. The RSI is also suggesting selling in the Loonie, but we may see a slight upward correction before bearish breakout triggers. Let's look for selling below 1.3985. Good luck!