USDCAD after a short break on Friday, today resumed the downtrend threatening for on more time a break below the 1.32 mark. After a slow start today the pressure to USD accelerated after a big miss in NY Empire State Manufacturing Index. The index dropped to 3.7 in August well below the analyst’s consensus of 15 and the previous reading of 17.2.
Three Factors That Drive USDCAD Lower
Here are the three main factors that push USD lower versus CAD:
Feds accommodative policy and huge relief packages by the US government as a response to the negative impact of the coronavirus lockdown.
An outperform of the Canadian economy versus the US economy after the easing of the restrictions.
The strong rebound in crude oil prices, Canada’s main export product as global demand picks up.
USDCAD Price Analysis
The USDCAD is 0.44% lower at 1.3205 approaching the February lows, as all the attempts to higher levels meet sharp selling pressure. The pair breached below the 1.32 mark briefly the previous week but managed to return above 1.32. This week the bears started stronger and now would challenge the first support at 1.3202, today’s low. In case of a break lower for USDCAD, the next target would be 1.3186 the low from August 13 trading session. More bids would emerge at 1.3141 the low from January 29.
On the upside, first resistance stands at 1.3263 today’s high. The next obstacle for the pair stands at 1.3340 the top from August 12. Bulls need a break above the 50-day moving average at 1.3478 in order to return to the driver’s seat for the pair.
USDCAD Daily Chart