The USDCAD is trading higher after Canada’s Prime Minister Trudeau announced Friday that his government would extend the emergency wage subsidy program until the end of August.
Canada’s Emergency Wage Subsidy (CEWS) gives employers of labour a 75% employee wage subsidy for up to 12 weeks, to a maximum of $847 a week. It was backdated to commence on March 15, 2020 and was to end on June 6, 2020. Today’s extension will take the extension to the end of August and is expected to cost more than $73billion.
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Technical Outlook for USDCAD
In the last thirty minutes, the US Dollar has ignored the dismal retail sales data and is gaining on the day. This scenario seems to be more of the price action trigger than the Canadian PM’s announcement. Whatever the case, this price move has taken the USDCAD once more to the upper border of the symmetrical triangle on the daily chart.
A break above the triangle brings the USDCAD into contact with the 1.41514 resistance. This resistance must give way if price advance towards 1.42746 (March 26 and April 21 highs) is to happen. Further resistance levels lie at 1.43431 and 1.45177, and they could become relevant if the USDCAD continues an advance beyond 1.42746.
On the flip side, a rejection of price at the triangle’s upper border opens the door towards 1.40023 (50% Fibonacci retracement from the swing low of March 3 to the swing high of March 18). A breakdown of this support brings the lower triangle border into focus. If the lower edge gives way, then 1.38605 (61.8% Fibonacci retracement) becomes the next logical target, with 1.37629 and 1.36961 also remaining relevant to any further declines.
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