Home Forex Market Analysis Forex Signals USD/CAD Breaking Underneath Double Bottom Support – Brace for Sell! 

USD/CAD Breaking Underneath Double Bottom Support – Brace for Sell! 

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The USD/CAD pair was closed at 1.30589 after placing a high of 1.30967 and a low of 1.30192. The USD/CAD fell to its lowest since 1st September on Friday before rising and posting gains for the day.

After posting sharp losses for the previous four days, the USD/CAD pair reversed and posted gains on Friday despite the broad-based US dollar weakness. The main driver of the USD/CAD pair on Friday was the Crude oil prices.

The WTI Crude Oil prices declined to $37.06 per barrel on Friday amid the rising number of lockdown restrictions from the European nations and other countries. The resurgence of the second wave of coronavirus forced governments to re-impose restrictions, raising concerns for oil prices.

As the previous lockdowns decreased the crude oil prices to its lowest level in history, the same fears emerged in the market after the second wave of virus escalated. These lingering fears kept the crude oil prices under pressure and weighed on commodity-linked Loonie that ultimately pushed the USD/CAD pair on the higher side.

On the data front, at 18:30 GMT, the Employment Change from Canada for October rose to 83.6K against the forecasted 59.0K and supported the Canadian dollar and capped further upside of the USD/CAD pair. The Unemployment Rate from Canada for October also declined to 8.9% from the forecasted 9.0% and supported the Canadian dollar. At 20:00 GMT, the Ivey PM for October from Canada declined to 54.2 against the projected 55.2 and weighed on the Canadian dollar and supported the USD/CAD pair’s gains on Friday.

From the US side, at 18:30 GMT, Average Hourly Earnings from the US for October fell to 0.1% from the predicted 0.2% and weighed on the US dollar and capped further gains in the USD/CAD pair. For October, the Non-Farm Employment Change rose to 638K against the predicted 595K and supported the US dollar and pushed the pair USD/CAD further on the upside. The Unemployment Rate from the US in October dropped to 6.9%from the predicted 7.7% and supported the US dollar. At 20:00 GMT, the Final Wholesale Inventories for September came in as 0.4% against the expected -0.1% and weighed on the US dollar.

Meanwhile, the US dollar was weak across the board due to the chances of Joe Biden’s victory in US elections on Friday as he was expected to deliver a larger stimulus package. However, the US dollar weakness only affected the pair in an early trading hour at the ending day of the week and failed to impact the USD/CAD pair’s prices in a late trading hour due to declining crude oil prices.


Daily Technical Levels

Support Resistance

1.2989 1.3142

1.2931 1.3237

1.2836 1.3295

Pivot point: 1.3084

The USD/CAD pair is trading with a selling bias below the 1.3007 area, having violated the support area of the 1.3025 level. On the lower side, the bearish breakout of the 1.3025 level can extend selling bias until the 1.29720 level. Continuation of a selling bias can help us capture a quick sell trade until the 1.2972 area. So far, the MACD and EMA are neutral as the market lacks volatility. But we can expect some price action during the European session. Let’s brace for it. Good luck! 

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