USDCAD Pare Losses After Weak US Initial Jobless Claims Data


USDCAD continues lower for the fourth consecutive session but is off the daily lows as USD attracted some bids after worse than expected initial jobless claims from the USA. The Initial Jobless Claims came in at 1416K above the forecasts of 1300K in the week of July 17. The Continuing Jobless Claims came in at 16.197M below the expectations of 17.067M on July 10, while the 4-week average declined to 1360.25K on July 17 from previous 1375K.

The weak jobless claims boosted the risk aversion sentiment, which is USD positive. USD was under selling pressure the last weeks on broad optimism about a faster than expected economic recovery after the coronavirus lockdown. Investors shift their attention to more risky currencies while they dump the safe-haven USD.

The Canadian dollar lost the support that gets from crude oil prices as they turn negative after the US markets open. As of writing the WTI futures are 0.53% lower at 41.69, while the brent price is 0.59% lower at 43.95.

USDCAD Price Technical Analysis     

The USDCAD is 0.09% lower at 1.3404 having hit earlier the lowest level since June 10. Some buying interest emerged after the initial jobless claims data moved the pair away from monthly lows, but the outlook remains bearish for the pair. Bulls need to break above the 200-day moving average at 1.3513 in order to regain control. For now, any upside move could be considered as a selling opportunity. 

Looking south, the initial support for USDCAD pair stands at 1.3371 the daily low. If the USDCAD breaks below 1.3371, the next support will be met at 1.3317 the low from June 10. The next target would be met at 1.3270 the low from February 26.  

On the flip side, first resistance for the pair stands at 1.3427 the daily high. If USDCAD breaks higher, the next resistance zone will be met at 1.3513 the 200-day moving average. The next hurdle for USDCAD is at 1.3594 the high from July 20. 

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USDCAD Daily Chart

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