The USD/CAD pair was closed at 1.28019 after placing a high of 1.28224 and a low of 1.26851. Since January 11 on Wednesday, amid the US dollar’s broad-based strength and declining crude oil prices, the currency pair rose to its highest. The US Dollar Index measures the greenback’s value against the basket of six major currencies settled above 90.50 level and supported the US dollar. The US dollar gained traction in the market ahead of the US Federal Reserve monetary policy decision and its safe-haven status.
The risk-averse market mood driven by the rising fears about the negative impact of the lockdown restrictions provided support to the safe-haven US dollar. The US dollar strength remained intact even after the Federal Reserve policy announcement on Wednesday and pushed the currency pair USD/CAD higher on board.
The US Federal Reserve kept its interest rates near zero and asset purchase program at the same pace of $120 billion per month. The Bank stated that the US economic recovery remains moderate throughout the month. The economic path was dependent on the progress made in the pandemic and the vaccination program. These comments from the US Central bank and its Chairman gave strength to the local currency greenback that ultimately added gains in the currency pair USD/CAD on Wednesday.
On the data front, at 18:30 GMT, the Core Durable Goods Orders for December increased to 0.7% against the projected 0.5% and supported the US dollar that added further gains in the USD/CAD pair. In December, the Durable Goods Orders weakened to 0.2% against the projected 1.0%, weighed on the US dollar, and capped further upside momentum in the USD/CAD pair.
On the other hand, there was no macroeconomic data from the Canadian side, and on the West Texas Intermediate (WTI) crude oil front, the oil remained under pressure due to rising prices of the US dollar. The crude oil fell to $51.84 on Wednesday and weighed on the commodity-linked currency Loonie, which ultimately pushed the already rising USD/CAD pair.
Entry Price – Sell 1.2879
Stop Loss – 1.2930
Take Profit – 1.2810
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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