The USD/CAD pair was closed at 1.31037 after placing a high of 1.31164 and a low of 1.30631. After placing losses for two consecutive days, the USD/CAD pair raised on Tuesday amid the declining crude oil prices and weak Canadian dollar. The Canadian dollar was weak on Tuesday as the crude oil prices declined after the coronavirus cases surged in the US to an alarming level and forced many states to re-impose lockdown restrictions. The restrictions meant less use and demand for energy and weighed on crude oil prices that were also considered commodity-linked Loonie. The weak Loonie then eventually pushed the USD/CAD pair higher on Tuesday.
The rising hopes of a coronavirus vaccine after the release of Moderna vaccine promising test results and market speculation about a likely OPEC+ agreement to extend output cuts beyond January 2021 failed to offset fears about the economic consequences of the escalating numbers of infections and deaths in Europe and the US. On the data front, the US dollar remains weak after the release of macroeconomic data on Tuesday. At 18:30 GMT, the Core Retail Sales from the US dropped to 0.2% against the expected 0.6% and weighed on the US dollar that capped further gains in the USD/CAD pair. The Retail Sales in October from the US also fell to 0.3% from the anticipated 0.5% and weighed on the US dollar. The Import Prices in the US for October also fell to -0.1% from the expected 0.2%and weighed on the US dollar.
At 19:00 GMT, the Capacity Utilization Rate from the US surged to 72.8% against the estimated 72.3% and supported the US dollar that provided support to the USD/CAD pair’s bullish moves. The Industrial Production remained flat at 1.1% in October. At 20:00 GMT, the Business Inventories for September raised to 0.7% against the expected 0.5% and weighed on the US dollar. The NAHB Housing Market Index from the US surged to 90 from the expected 85 and supported the US dollar that eventually supported the USD/CAD pair’s gains on Tuesday.
From the Canadian side, the Housing Starts for October were released at 18:13 GMT that dropped to 215K from the forecasted 220K and weighed on the Canadian dollar that eventually pushed the USD/CAD pair higher. At 18:30 GMT, the Foreign Securities Purchases were dropped to 4.46B against the projected 5.0B and weighed on the Canadian dollar that ultimately added strength to the USD/CAD pair. The Wholesale Sales from Canada raised to 0.9% against the forecasted 0.4% and supported the Canadian dollar.
Daily Technical Levels
Support Resistance
1.3070 1.3127
1.3037 1.3151
1.3014 1.3184
Pivot point: 1.3094
The USD/CAD pair is trading over the 1.3060 level, mostly supported by the CPI report. A bearish breakout of the 1.3060 level can drive the selling trend until the 1.2935 area. While on the other hand, the resistance stays at the 1.3173 level today. The MACD and RSI are in support of the selling trend; thus, we may consider taking a selling trade only upon the breakout of the 1.3055 level and buying over the 1.3060 level. Good luck!
