The USD/CAD pair was closed at 1.33808 after placing a high of 1.34366 and a low of 1.33564. Overall the movement of USD/CAD remained bearish throughout the day. On Monday, the U.S. dollar fell against the Canadian dollar to 3 months low on the back of the risk-on market sentiment. However, analysts believe that risk sentiment will ease in the near term and will keep a lid on further losses.
At 17:17 GMT, the Housing Starts in May were increased to 193K from the expected 160K and supported the Canadian dollar, which ultimately weighed on the USD/CAD pair. Another factor involved in the Canadian dollar strength was the uptick in WTI crude oil prices on Monday. The crude oil rose to near $40 per barrel after the OPEC+ agreed to extend the withdrawal of global supplies with almost 10% until the end of July.
China's crude import hit an all-time high in May, and it gave a boost to the crude oil prices on Monday to its highest since 6th March. Increases crude oil prices gave Commodity-linked Loonie strength and dragged the pair USD/CAD further towards the downside.
On the U.S. front, the selling bias around greenback took its pace in the wake of a better-than-expected jobs report on Friday, which raised the risk appetite and caused investors to withdraw money from safe havens, including greenback. The U.S. dollar index (DXY), which measures the U.S. dollar against the basket of 6 currencies, fell below 97.00 level to 96.88. The USD/CAD pair in the absence of any economic data from the U.S. followed the Canadian Dollar and Crude oil prices on Monday.
Daily Technical Levels
Pivot Point: 1.3392
The USD/CAD traded sharply bearish and drop to 1.3375 level; however, the oversold pair seems to bounce off in the wake of correction or profit taking by investors. Recently, the USD/CAD pair has closed a bullish engulfing candle that suggests the odds of bullish trend continuation above 1.3374 support level. A bullish engulfing candle can lead the USD/CAD prices further higher until the next target level of 1.3550 level, where the pair will also encounter the 50 periods EMA. By the way, the downward channel is also suggesting that the overall trend is bearish, so we should look for selling trades below 1.3520 level. Good luck!