The USD/CAD pair was closed at 1.33195 after placing a high of 1.33896 and a low of 1.32777. On Thursday, the USD/CAD pair moved higher in the early trading session due to the rising demand for the U.S. dollar and declining crude oil prices on the day. However, the gains in USD/CAD failed to remain until the end of the day, and the pair lost all of its gains at the late trading session on Thursday and provided a flat movement for the session.
The USD/CAD pair closed its day at the same level it started its day with at 1.33195 on Thursday. The rise in the USD/CAD pair was due to the strength of the U.S. dollar onboard. The U.S. Dollar Index rose to 94 levels on Thursday to its highest level in a month and supported the upward momentum of the USD/CAD pair. The U.S. dollar was also strong as the House Speaker Nancy Pelosi killed the hopes that a U.S. stimulus package will be delivered after the U.S. elections. These uncertainties raised the risk sentiment and helped the risk perceived USD/CAD pair to rise on Thursday.
Furthermore, the heavy selling pressure surrounding the WTI crude oil prices provided a boost to USD/CAD prices in the early trading session. The concerns over the negative impact of the rising number of coronavirus cases globally have been causing an uneven recovery in energy demand. The increasing number of countries imposing restrictions raised concerns for energy demand and the WTI Crude oil prices suffered on Thursday and fell below the $35 level to $34.92 per barrel. The sharp decline in WTI crude oil prices weighed on commodity-linked Loonie and supported the upward momentum of the USD/CAD pair.
On the data front, from the U.S. side, at 17:30 GMT, the Advanced GDP for the quarter rose to 33.1% from the expected 32.0% and supported the U.S. dollar. The Unemployment Claims for the previous week declined to 751K from the estimated 773K and supported the U.S. dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter rose to 3.6% from the projected 2.9% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for September fell to -2.2% from the anticipated 3.1% and weighed on the U.S. dollar.
The strong GDP and unemployment claim data from the US-supported US dollar and added strength to the USD/CAD pair on Thursday. While from the Canadian side, the Building Permits for September came in as 17.0% against August’s 1.4% and supported the Canadian dollar that kept the gains in the USD/CAD pair limited. The pair USD/CAD started losing all of its daily gains in late trading session as profit-taking started in the market. The USD/CAD pair rose to its one-month highest level but failed to remain there and dropped to give flat movement for Thursday.
Daily Technical levels
Pivot point: 1.3277
The USD/CAD pair is trading choppy session within 1.3339 – 1.3300 as traders seem to wait for a solid reason to trigger a breakout. In any case, a bearish breakout of 1.3300 level can extend selling bias until 1.3240 level, and below this, the double bottom level is likely to provide next support at 1.3112. Conversely, the bullish breakout of 1.3340 level is likely to target the 1.3420 mark. The MACD and RSI are in support of bullish bias; however, the signal isn’t that strong yet. Let’s brace to trade the breakout pattern today. Good luck!