Extends losing spell for fourth trading session – Crypto News – Crypto News
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USD/CAD climbs to 1.3200 neighborhood amid sliding oil prices, modest USD strength USD/CAD climbs to 1.3200 neighborhood amid sliding oil prices, modest USD strength

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Extends losing spell for fourth trading session – Crypto News

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2 years ago

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  • USD/CAD drops further to 1.3720 as the Canadian Dollar holds strength despite weak Oil prices.
  • This week, the US Core PCE Price Index and Q1 GDP data will guide the US Dollar.
  • USD/CAD corrects after a sharp rally, driven by an Ascending Triangle breakout.

The USD/CAD pair continues its losing streak for the fourth trading session on Monday. The Loonie asset drops to 1.3720 as investors have underpinned the Canadian Dollar against the US Dollar despite multiple headwinds.

The Canadian Dollar holds strength even though the Oil price plummets below $81.00. The appeal of the Oil price weakens as geopolitical risks ease after Friday’s event in the Middle East indicated that Iran was downplaying Israel’s limited retaliatory attack. Lower Oil prices generally dent demand for the Canadian Dollar, as Canada is the leading exporter of Oil to the United States.

Also, the soft Canadian inflation outlook fails to dampen the Canadian Dollar outlook. Bank of Canada’s (BoC) preferred inflation measure that excludes eight volatile items annually ease to 2% in March, prompting expectations of early rate cuts.

Meanwhile, the US Dollar consolidates above 106.00 as investors shift focus to the preliminary Q1 Gross Domestic Product (GDP) and the core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Thursday and Friday, respectively.

USD/CAD delivered a sharp rally after a breakout of the Ascending Triangle chart pattern formed on a daily timeframe. The near-term outlook remains strong as the 20- and 50-day Exponential Moving Averages (EMAs), which trades around 1.3680 and 1.3600, respectively, are moving higher.

The 14-period Relative Strength drops to near 60.00 but still holds inside the bullish range of 60.00-80.00.

As a mild correction is generally followed by a sharp rally after a breakout, a mean-reversion move to near the 20-day EMA around 1.3680 will present a buying opportunity to market participants. Investors would find resistance near the 22 November 2023, high at 1.3766, followed by the round-level resistance of 1.3800.

In an alternate scenario, a breakdown below April 9 low around 1.3547 will expose the asset to the psychological support of 1.3500 and March 21 low around 1.3456.

USD/CAD daily chart

 

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