The Loonie took a massive hit this Wednesday as risk aversion took hold of the markets shortly before the onset of the NY session. Crude oil prices fell as soaring coronavirus cases, and a lack of any further stimulus from the US Congress sent risk-seeking assets into the red.
This Wednesday, the Bank of Canada (BoC) held interest rates at 0.25%, which met market expectations. Governor Tiff Macklem and Senior Deputy Governor Carolyn A. Wilkins delivered their post-decision comments in a press conference. They highlighted the bank’s readiness to keep providing monetary stimulus to support the recovery of the Canadian economy through the recovery.
Technical Outlook for USDCAD
Today’s upsurge in the USDCAD sent the pair towering beyond the neckline of the double bottom pattern visible on the daily chart. Price looks firmly primed to attain the price projection from the neckline breakpoint, which can be found at the 1.33487 resistance. Continued advance on the pair as a result of a further flight to safety could allow for a push towards 1.34656.
On the flip side, a rejection at 1.33487 could allow for a pullback to the neckline at 1.32044, where the pair may launch another try towards the resistance targets just identified. Alternatively, a breakdown of the neckline targets 1.31501 initially, with a bounce off the troughs that form the double bottom transforming the pattern into an evolving triple bottom pattern.
Traders on the pair can look towards the US elections to get an additional fundamental impetus for the pair, even as the coronavirus situation in the US may continue to drive sentiment on the pair heading into next week’s election.
USDCAD Daily Chart
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