USDCAD hit almost eight-month lows today during the European session but managed to rebound in the early American session. The dollar shows some strength now, and the dollar index (DXY) turned positive.
Traders await the Jerome Powell speech in Jackson Hall symposium on Thursday. Investors want to see if the Fed chairman will signal a shift to its inflation target to average. That will push inflation higher before the Fed raise the interest rates.
Recent weak economic data from USA and the outperformance of the Canadian economy after the lockdown drove the pair to January lows, and the dollar index to two and a half year lows. Earlier today reported that the United States Chicago Fed National Activity Index registered in at 1.18 well below the expectations of 2.73.
Rising oil prices continue to support the Canadian Loonie as oil is Canada’s main export product. Crude oil is 1.34% higher today at $44.86.
USDCAD Daily Technical Analysis
The USDCAD is 0.40% higher at 1.3223 in a move that shows that the USD attempts to reverse the August heavy losses against the CAD. The Canadian dollar has gained 1.8% against the greenback this month.
Bears are in control, but if USD manages to hold above 1.32 might see a rebound. Bulls would face the intraday resistance at 1.3230 -today’s high. More selling pressure would be met at 1.3267 the high from August 14. Above that, the next resistance stands at 1.3405 the high from August 10.
On the other side, support for USDCAD is at 1.3134 the daily low. The next support zone would be met at 1.3037 the low from January 22.
USDCAD Daily Chart