USDCAD returns to positive territory after a weak start as the crude oil price gives up gains that were almost up to 7% earlier in the European session. The volatility in the markets is positive for the USD as investors run for cover to safe-haven assets. The pair hits the highest level since 2016 today as the oil price tumbled this week.
The University of Michigan’s Consumer Sentiment Index came in at 95.9 for March above the expectations of 95, but still a sharp drop from 101 in February.
The Fed cut the interest rates by 50 basis points to 1% -1.25% in an emergency move. Bank Of Canada followed immediately with a 50 basis point cut to 1.25% in a move to combat the coronavirus outbreak impact on the global economy.
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USDCAD Price Analysis
The USDCAD is 0.23% higher at 1.3955 as it managed to rebound from early losses down to 1.3781 showing that the bulls are in full control of the pair. The technical outlook is clearly bullish for USDCAD as the pair makes consecutive higher highs and higher lows.
On the upside, first resistance stands for USDCAD at 1.3395 the daily top. In case of a break above, the next hurdle is at 1.4014 the high from February 11, 2016. Next hurdle for bulls is at 1.4103 the high from January 26, 2016.
On the other side, the first support for the pair stands at 1.3781 the daily low. If the USDCAD breaks below, the next support level will be met at 1.3704 the low from yesterday’s trading session. In case of a move lower, then the next target will be met at 1.3678 the March 11th lows.
All in all, the momentum is clearly bullish, but as the pair has entered extreme overbought levels, we can’t rule out a sharp correction.
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