-
USD/CAD meets a new supply on Friday and is pressured by a combination of factors.
-
A break below the 1.3600-1.3590 confluence support will pave the way for deeper losses.
-
Investors are now looking to monthly Canadian GDP and US PCE data for fresh stimulus.
The USD/CAD pair comes under some renewed selling pressure on the last day of the week and continues losing ground through the first half of the European session. The pair drops to the 1.3600 mark, or a fresh daily low in the last hour, and is pressured by a combination of factors.
Equity markets saw a moderate recovery weighing on the safe-haven US dollar. Also, buoyant crude oil prices underpin the commodity-linked loonie and exert some downward pressure on the USD/CAD pair. Traders now look to the monthly Canadian GDP report and US Personal Consumption Expenditure (PCE) data for a fresh stimulus during the first North American session.
From a technical perspective, the USD/CAD pair is currently hovering just above confluence support, with a 100-period SMA and a six-week-old uptrend line on the 4-hour chart. With oscillators drifting lower into bearish territory on the hourly chart and losing traction on the daily chart, a credible break below would be seen as a new trigger for a bearish trade.
Some follow-through selling below weekly lows, near the 1.3570 region touched on Thursday, will reaffirm the negative bias and weaken the USD/CAD pair. The spot price could then accelerate the decline towards testing the 1.3500 psychological mark. The downward trend may extend towards the 1.3455-1.3450 intermediate support at the 1.3400 round figure (100-day SMA).
On the flip side, the 1.3650 area now seems to act as an immediate resistance. A sustained move above could allow the USD/CAD pair to make a fresh attempt to conquer the 1.3700 mark. Some follow-through buying will be seen as a fresh bullish breakout and lift spot prices towards the 1.3745-1.3750 hurdle en route to the November monthly swing high, around the 1.3800-1.3810 region.
USD/CAD 4-hour chart
Key levels to watch
USD/CAD
