Dollar/CAD advanced to higher ground as everything went against the loonie. A relatively light week regarding events leaves the focus on stocks, oil, and NAFTA. Here are the highlights and an updated technical analysis for USD/CAD.
The stock market collapse hurt the Canadian dollar, a risk currency. Oil prices suffered from the sell-off in stocks and also from rising US production. To top it off, Canada lost no less than 88K jobs in January, although this came after two excellent months beforehand and wages increased nicely. All in all, the Canadian dollar had everything against it.
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
* All times are GMT
USD/CAD Technical Analysis
Dollar/CAD initially moved lower, breaching the 1.2280 level mentioned last week. It then made a bit turnaround but stalled beneath 1.2435.
Technical lines from top to bottom:
1.2790 was the high in mid-November and serves as resistance. 1.2665 was a was a double-bottom in November and works as strong support.
It is followed by 1.26, a round number that worked as resistance in October. 1.2540 capped the pair in early October when it traded in a narrow range.
1.2435 was a cushion for the pair during the month of October. 1.2335 gave support to the pair in late September and it worked well in January 2018.
Even lower, 1.2250 cushioned the pair on its fall in February 2018. It is closely followed by 1.22
Strong support only awaits at 1.2070. The round number of 1.20 is next. And below there, only 1.18.
I am bullish on USD/CAD
The excellent US jobs report could continue supporting the greenback while the loonie could suffer from its own report. In addition, oil prices seem to have peaked. These factors could push USD/CAD higher in the short term. Once the worries about NAFTA subside, things could change.
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