USDCAD turned sharply higher today snapping a four-day advance, as the crude oil slumped to 17-year lows, while Fed’s unlimited QE support USD. The Bank of Canada slashed interest rates by 50 basis points that bring the overnight target to 0.25% in an emergency meeting. The Bank also launched a Commercial Paper Purchase Program to help restore a vital source of short-term funding for companies and will begin purchasing government securities in the secondary market amid the coronavirus outbreak.
On Thursday the Labor Department announced the Initial Jobless Claims for March 20 week which skyrocketed to 3,283,000 from 282,000 the previous week, reflecting the impact of the coronavirus spread on the economy. The U.S. GDP came in at 2.1% in line with estimates for the fourth quarter.
Extra pressure on loonie puts a sharp sell-off on crude oil which is down 5.95% at $20.22 per barrel the lowest level since 2003.
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USDCAD Technical Evaluation
The USDCAD is 1.10% higher at 1.4131 as the recent USD correction stalled at two-week lows and managed to rebound today. The technical outlook is still positive for USDCAD despite the four-day recent correction, as the pair holds above the major daily moving averages.
On the upside, the initial resistance for USDCAD pair stands at 1.4168 the daily top. If USDCAD breaks higher, the next resistance level will be met at 1.4279 the high from March 26th. In case of a breakout higher, the next hurdle stands at 1.4482 the high from March 25th trading session.
On the flip side, the first support for the pair stands at 1.4011 the daily low. If the USDCAD pair breaks below, the next support will be met at 1.3920 the low from Friday’s trading session. Next support area is at 1.3731 the March 16th low.
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