The USD/CAD currency pair continues to present challenges. It is attempting to find its breakout as it recovers from a challenge at the 1.3900 level yesterday. On Thursday, ahead of the North American session during the Asian session, new sellers emerged on USD/CAD. This resulted in a slight decrease as the US dollar fell slightly. At the moment, USD/CAD is hovering just above the 1.3865 mark, which is a loss of under 0.10% on the day.
More recently, the USD/CAD has turned sharply lower. This trend can further drive it to the 1.3800 level, getting it close to the year-to-date low around the 1.3750 region. The prevailing market sentiment is as bullish as it gets. If USD/CAD holds or builds momentum above the 1.4000 figure, it may quickly break the 1.4050 resistance and move towards the 1.4100 psychological level.
Given the widespread selling pressure, analysts suggest the downside for USD/CAD could be capped approaching the 1.3900 level. Bullish traders are watching the developing situation closely. Right now, they’re especially keyed in to what could be some impactful economic data to come, including the US Producer Price Index (PPI) and an upcoming appearance from Federal Reserve Chair Jerome Powell.
It’s technical Charts indicate that oscillators on the daily chart for USD/CAD are building positive momentum. This advance may be indicative of future areas of support for the currency pair. Market participants are looking to buy any further declines, especially close to the 1.3935 zone.
The most important factor driving USD/CAD movement recently has been the sharp drop in crude oil prices. This recent fall has put downward pressure on the loonie, the market-linked Canadian dollar. This dynamic is a tailwind for USD/CAD and is giving the pair some cushion from the broader market volatility.