USD/CAD rebounds from monthly lows despite dollar’s weakness
|- Loonie among worst performers in the market on Wednesday.
- USD/CAD now neutral for the day after hitting lowest since early-September.
The USD/CAD pair printed a fresh daily high at 1.3139 despite the decline of the US dollar across the board. Earlier on Wednesday during the European session the pair bottomed at 1.3080, the lowest level since September 7.
The rebound took place amid a decline in crude oil prices and after Canadian economic data. Also, some profit-taking in some CAD’s crosses might have weighed on the loonie. The WTI barrel is falling 3.50%, trading slightly above $40.00.
On Tuesday AUD/CAD bottomed at 0.9245, the lowest since June and it has rebounded more than a hundred pips, a similar pattern is following NZD/CAD. Both, the aussie and the kiwi are sharply higher versus the US dollar on Wednesday.
Economic data from Canada showed a lower than expected increase in retail sales in August and the CPI index rising to 0.5% (year-over-year) in September. “Our current forecast has headline CPI growing just 1.2% in 2020. That benign inflation backdrop is in line with the Bank of Canada’s expectations, and should leave monetary policymakers free to maintain interest rates at exceptionally low levels for the foreseeable future”, explained analysts at RBC Economics.
As of writing, USD/CAD trades at 1.3115/20, around the same level it closed on Tuesday. The rejection from below 1.3100 could suggest some consolidation ahead, with the potential for a recovery to 1.3200, if it breaks the immediate resistance at 1.3150. A close below 1.3100 would expose the next strong support seen at 1.3030.
Technical levels
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