USD/CAD bites the dust at 1.3090; Is the dollar out?
Currently, USD/CAD is trading at 1.3090, down -0.68% on the day, having posted a daily high at 1.3183 and low at 1.3028 after a massive US dollar sell-off.
Richard Franulovich, Research Analyst at Westpac, shared his views on the market dynamics supporting a stronger CAD in the medium-term,“Both yield spreads and oil prices have broadly been trending in favour of a lower USD/CAD in recent weeks too.”hat the “mood” on Canadian growth prospects has improved in recent weeks, aided by solid jobs, PMIs and housing data in recent days."
WTI Oil - Stuck in a range
Adjusting positions has been the name of the game during the last two weeks for market participants in front of a weak narrative, at least that's the case for dollar bulls. Unless the so called established 'agreements' between OPEC and Non-OPEC members were to fail, then a rocky recovery may be in place for the loonie.
USD/CAD Technical Levels
Back to the charts, the medium-term view is quite tentative for short-sellers as prices keep trading below the 200 SMA (green color). The horizontal relative value for the pair has been around the resistance 1.3180 and a strong support level at 1.2970; for now. However, further confirmation is required for bears to stick their claws and make the exchange rate bleed towards a critical psychological on the 1.3000 figure.
On the long-term view, evidence to experience further losses are palpable as prices not only trade below the ascendant channel (March 2016) but left the inside of the uptrend triangle formation which lower foundation provided ongoing support to the previous bullish trend. To the upside, a break above 1.3160/80 would open doors to consider an attack on the 1.3350 handle. On the flip side, if dollar weakness continues, then 1.2970/50 is the immediate support zone to target. Finally, a bearish case wouldn't surprise and all things being equal, the pair could be inclined to fish for a bottom near 1.2780.
Dollar and Yields Ease Further, but Look for Recovery