The USD/CAD pair was closed at 1.33921 after a high of 1.34178 and a low of 1.33322. Overall the movement of the USD/CAD pair remained bullish throughout the day. The currency pair USD/CAD posted gains on Friday amid the US dollar’s broad-based strength and the declining crude oil prices. The USD/CAD pair posted the biggest weekly gain on Friday since March as the US dollar gained its safe-haven status back.
The US Dollar Index that measures the value of the US dollar against the six currencies’ basket rose above 96.6 level on Friday and reached its 2-months highest level. The rise in the greenback gave a push to the USD/CAD pair on Friday. The US dollar was strong across the board as the market’s rising level of uncertainties called for a safe-haven appeal. The delayed US stimulus package, the rising number of coronavirus figures from Europe, and the escalating US-China tensions kept the uncertainty level high.
There were also increased concerns about economic recovery due to depressing macroeconomic data releases from many countries. On Friday, the Core Durable Orders declined to 0.4% in August from the projection of 1.0%, and the Durable Goods Orders also dropped to 0.4% against the forecast of 1.1% in August. These negative economic figures raised the economic recovery fears and supported the safe-haven appeal.
The fears for the next round of US stimulus package’s late delivery increased in the market as there was no progress in talks. Chances have been increased that no new stimulus measure will be announced before the US Presidential elections on 3rd November.
Meanwhile, the European countries were experiencing the latest round of coronavirus pandemic as France & UK, with some other member states, faced the highest rise in daily infected cases. In 24 hours, France reported more than 16000 cases, while the UK reported more than 6600 cases. Both countries saw the highest level of reported cases in a single day since the pandemic started.
Furthermore, the rising conflict between the world’s two largest economies over the coronavirus pandemic and its origin at the United Nations General Assembly (UNGA) raised fears for a new Cold-war.
The above-mentioned fears and concerns kept the market risk sentiment under pressure and demand for safe-haven appeal at high that supported the US dollar and, ultimately, the USD/CAD pair on Friday.
Moreover, the declining crude oil prices on Friday weighed on commodity-linked Loonie when prices of WTI Crude oil futures dropped below $41 per barrel. The decreased crude oil prices could be attributed to the rising safe-haven appeal and US dollar prices as the greenback and crude oil prices negatively correlate. The declining Canadian dollar supported the USD/CAD pair’s an upward trend on Friday and helped the pair to post the most significant weekly gains since March. There was no economic data to be released from Canada, and hence, the team followed the USD movements only.
Daily Technical Levels
Pivot point: 1.3383
Technically, the USD/CAD pair has disrupted the strong resistance mark of 1.3345, and on the higher side, the aim for USD/CAD is expected to stay at 1.3394. The 50 EMA and the MACD are underpinning the upward movement in the market; therefore, we have opened a buy trade in the USD/CAD pair. Let’s follow the below trade plan…
Entry Price – Sell Limit 1.34053
Stop Loss – 1.33057
Take Profit – 1.33857
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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