USDCAD trades 0.12% lower at 1.3278, as the pair retreat from two week-highs. USD safe-haven status attracted bids yesterday up to 1.33 mark. Traders attention has shifted from the fundamentals to the coronavirus outbreak developments. Crude oil is another victim of the virus and is the main export product of Canada also affects the Canadian loonie.
Next week the Bank of Canada has a policy meeting with the odds of a rate cut rising. BOC was on hold during 2019, while Fed cut rates three times. For now the interest rates differential is CAD positive but things might change if the central bank enters an easing cycle.
On the economic data, the Philly Fed Nonmanufacturing Index came at 36.1 in February from 23.5 in January. The United States S&P – Case-Shiller Home Price Index came in at 2.9% topping the forecasts of 2.8% in December. The Housing Price Index came in at 0.6%, above estimates of 0.3% for December.
The USDCAD retreat today as markets calmed after yesterday’s sell-off. The technical outlook is positive but the pair needs to break convincingly above the 1.33 in order to initiate another leg higher.
On the downside, first support for the USDACD pair stands at 1.3270 the daily low. If the USDCAD pair breaks below, the next support level will be met at 1.3214 the 200-day moving average. In case of further pressure then the next target will be met at 1.3180 the 100-day moving average.
On the flip side, initial resistance stands at 1.3305 the daily high. In case of a break above, the next hurdle is at 1.3319 the high from February 11th. The three-month highs at 1.3329 will provide the next supply zone.