USDCAD trades higher after the two day’s correction from the four-year highs as the FED stepped in with aggressive measures to offset the coronavirus outbreak impact on the economy. The Federal Reserve will buy $250 billion in MBS this week and also will buy $375 billion in Treasuries.
Above that will relaunch TALF to support the consumer and business debt and will set two facilities to support the corporate debt markets. the Federal Reserve also announced that they would buy corporate bonds for the first time.
The crude oil, Canada’s main export product is still under pressure and earlier today hit the lowest level since 2002, and that doesn’t help the Canadian Loonie.
On the economic news, the Chicago Fed National Activity Index surprised positive and climbed to 0.16 from previous -0.25 in February.
The USDCAD is 0.61% higher at 1.4427 but off the daily highs after the pair rejected at 1.45 area. The intraday correction helped by the Fed’s emergency measures but doesn’t change the short term picture. The technical outlook is bullish for USDCAD, and only a close below 1.41 might cancel the upward trend.
On the upside, intraday resistance for USDCAD stands at 1.4491 the daily high. If the pair breaks higher, the next resistance will be met at 1.4540 the high from Friday’s trading session. The recent high from March 19th at 1.4666, might provide the next supply zone
On the flip side, first support for USDCAD stands at 1.4335 the daily low. If the USDCAD pair breaks below, the next support level will be met at 1.4150 the low from Friday’s trading session. In case of a move lower, the next support will be reached at 1.3959 the March 17th lows.