The USD/CAD pair was closed at 1.27434 after placing a high of 1.27789 and a low of 1.26871. The USD/CAD pair continued its bullish movement for the 3rd consecutive session on Monday and reached above 1.27700 level amid the broad-based US dollar strength despite the risk-off market sentiment and the rising crude oil prices on the day.
The greenback gathered strength against its rivals after a sharp decline in EUR/USD pair triggered by the disappointing German Ifo Business Climate on Monday. The US Dollar Index climbed above 90.30 with the initial marker reaction and made the US dollar stronger on board, ultimately pushing the USD/CAD pair higher.
Another reason behind the rising US dollar prices was the speculations that the $1.9 trillion stimulus package proposed by Joe Biden is expected to face rejection by Democrats and Republicans in the Senate as they were not in favor of more spending just after a month in massive expenditures of $900 billion. The hopes that the US’s massive stimulus package will be delayed due to a difference of opinion gave strength to the US dollar that pushed the rising USD/CAD prices on Monday.
Meanwhile, the USD/CAD pair traders ignored the rising West Texas Intermediate crude oil prices on Monday. The crude oil prices rose by 1.5% on the day and supported the commodity-linked currency Loonie that ultimately capped further upside in the USD/CAD pair’s rising prices.
However, On Monday, Canada marked the anniversary of the first case of coronavirus that was identified in the country. After a year of living with the pandemic, Canada dealt with the increasing spread of new and more contagious variants. Canada reported six new cases of the UK variant of coronavirus and 3 cases of the South Africa variant of coronavirus on Monday, up from 4 and 1.
The rising number of new variant cases of coronavirus infections in Canada raised fears for the nationwide lockdown to curb the spread of this variant and raised threats for an economic recovery that ultimately weighed on the Canadian Dollar and added in the gains of USD/CAD pair on Monday. On the US front, the coronavirus deaths and cases per day in the US dropped markedly over the past couple of weeks but were still running at alarmingly high levels. The government’s top infectious disease expert Dr. Anthony Fauci said that improvement in numbers around the country appears to be the result of natural peaking and then plateauing after a holiday surge rather than an effect of the rollout of vaccines that began in mid-December. This diminishing rate of cases and deaths in the US added to the US dollar’s strength and supported the upward momentum in the USD/CAD pair on Monday.
Daily Technical Levels
Pivot Point: 1.2726
Entry Price – Sell 1.27067
Stop Loss – 1.27467
Take Profit – 1.26667
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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