Home Forex Market Analysis Forex Signals USD/CAD Resistance Become Support Level – Brace for Bullish Signal

USD/CAD Resistance Become Support Level – Brace for Bullish Signal

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During Tuesday’s Asian trading session, the USD/CAD currency pair managed to stop its previous session losses and refreshed daily highs, around the 1.3270 level due to the mixed sentiment around the crude oil prices, which tend to undermine the commodity-linked currency the Loonie and helps the currency pair to put the fresh bids during the early European session.

On the contrary, the broad-based U.S. dollar weakness, triggered by the combination of factors, could be considered as one of the key factors that kept the lid on any additional gains in the currency pair. As of writing, the USD/CAD currency pair is currently trading at 1.3269 and consolidating in the range between 1.3241 – 1.3274.

Despite the fears of fresh lockdown restrictions in the U.K. and Europe, the equity market sentiment remained well supported by optimism over the U.S. President Donald Trump’s recovery from COVID-19. As per the latest report, the U.S. President Donald Trump returned to the White House after a 3-night hospital stay due to coronavirus infection, which boosted the market risk tone and undermined the safe-haven U.S. dollar.

Apart from this, the possibilities of a soft Brexit remain high, which keeps investors relax. In the meantime, the U.S. House Speaker Nancy Pelosi and the Treasury Secretary Steve Mnuchin keep struggling even to start the stimulus talks, which add further boost around the market trading sentiment.

As a result, the broad-based U.S. dollar remained depressed as the investors continue to sell U.S. dollars in the wake of the market’s low safe-haven demand. Moreover, the U.S. dollar losses could also be associated with the rising hopes that the U.S. Congress will reach an agreement over the latest stimulus measures to control the economic impact of COVID-19. Thus, the U.S. dollar losses become the key factor that cap further gains in the currency pair. Whereas, the U.S. Dollar Index, which tracks the greenback against a bucket of other currencies, dropped by 0.03% to 93.468 by 9:52 PM ET (1:52 AM GMT).

At the crude oil front, WTI crude oil prices still reporting mixed signals. However, the crude oil prices took some bids during the early day, supported by the marker risk-on mood and weaker U.S. dollar. Besides, the crude oil prices’ gains were further supported by the reports that show growing workers’ strike in Norway that could reduce the country’s production capacity. Thus, the crude oil prices’ upticks underpinned the commodity-linked currency, the Loonie, and exerted some downside pressure on the currency pair.

Looking forward, the market traders keeping their eyes on the Fed Chair Jerome Powell’s scheduled speech. In the meantime, the updates surrounding the fresh Sino-US tussle, as well as the coronavirus (COVID-19), could not lose their importance.


Daily Support and Resistance

S1 1.3233
S2 1.3272
S3 1.3292
Pivot Point 1.3312
R1 1.3331
R2 1.3351
R3 1.339

The USD/CAD has closed a Doji candle over a resistance become support level of 1.3245, which signifies weakness in the selling bias. At the same time, the USD/CAD’s MACD is forming smaller histograms than before, and it’s an indication of a potential bullish bais. The USD/CAD may find the next resistance at 1.3305 and 1.3330 level while the support is likely to stay at 1.3245 and 1.3205.

Entry Price – Buy 1.32651
Stop Loss – 1.32251
Take Profit – 1.33051
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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