USDCAD Rebound As Investors Turn To USD For Cover

USDCAD trades higher, making two-week highs as investors looking for cover in safe-haven USD. Fears for the second wave of coronavirus infections send risky assets lower across the globe. The correction for the pair from multi-year highs in March stalled at 1.33 area below the 200-day moving average, but the risk-off sentiment last week drove the USDCAD price above the critical resistance which turned into support for the pair.

The Manufacturing Sales in Canada declined to $36.4 billion, by a record 28.5% more than expectations of -18.7% in April. In March Manufacturing Sales fall by 9.2%.

In the United States, the NY Empire State Manufacturing Index came in at -0.2, topping the expectations of -27.5 in June.

Crude oil, Canada’s main export product continues the correction for the third consecutive session, and the losses also weigh on Canadian Loonie.

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USDCAD Price Technical Analysis

The USDCAD is 0.53% lower at 1.3653 as the pair gains momentum above the 200-day moving average. The technical outlook for USDCAD is positive for the short term, and an attempt to 100-day moving average looks possible.

On the upside, the initial resistance for USDCAD stands at 1.3686 the daily high. If the pair breaks higher, the next hurdle will be met at 1.3762 the 100-day moving average. In case the buyers continue to bid, the next resistance stands at 1.3887 the 50-day moving average. 

On the flip side, minor support for USDCAD stands at 1.3580 the daily low. If the pair breaks below 1.3580, the next support will be met at 1.3525 the low from June 12. The next target to the downside for sellers will be at 1.3470 the 200-day moving average. 

 

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