The USD/CAD was closed at 1.36858 after placing a high of 1.37153 and a low of 1.36277. Overall the movement of the USD/CAD pair remained bullish throughout the day. The Canadian dollar extended its declines against the US counterpart on Friday on concerns about rising coronavirus cases in the United States and China, which weighed on crude oil prices.
The US crude oil was down 0.5% at $37.80 per barrel on Friday amid increased concerns over the renewed lockdown restrictions, which will cause decreased demand for crude oil and weighed on its prices. The reduced crude prices dragged the commodity-linked currency loonie and pushed the USD/CAD prices on the high side.
The Canadian dollar was also under pressure as the investors were worried that Washington could re-impose tariffs on Canadian aluminum after Canada lost one of its coveted AAA ratings when Fitch downgraded Canada for the first time. This came in after the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by lockdown due to the COVID-19 pandemic.
During the last week, Prime Minister Justin Trudeau said in response to Fitch's downgrade rating that Canada's emergency spending was needed to lay the groundwork for economic recovery. Canada sends about 75% of its exports to the United States, including US Crude Oil futures, which settled lower on Friday after the rating downgrade.
Besides, the US dollar was strong on the day as the US's releases were mixed yet bullish. At 17:30 GMT, the Core PCE Price Index for May increased to 0.1% against 0.0% and supported the US dollar. Personal Income from the US in May dropped4.2% against the expected drop of 6.0% and supported the US dollar. The US dollar remained strong, with the US Dollar Index rising on Friday at 97.63 level and pulled the pair USD/CAD with itself at the ending day of the week.
Daily Technical Levels
Support resistance
1.3667 1.3696
1.3654 1.3712
1.3639 1.3725
Pivot point: 1.3683
On Monday, the USD/CAD seems to exhibit bullish bais, especially after violating the downward trendline resistance level of 1.3550. As we can see, the commodity currency has breached the descending triangle pattern, and with this, the odds of bullish trend continuation increases. On the higher side, we may see Canadian dollar soaring until the level of 1.3688, which also marks a double top level. Above 1.3688, the next resistance level can be found around 1.3795, while support holds around 1.3550. Before we enter a buy trade, we should wait for correction until the 1.3550 level. Good luck!