USD/CAD Price Analysis: Picks strength around 1.3550 as anxiety soars ahead of US NFP
- Advancing anxiety ahead of the US NFP release has underpinned the risk-off impulse.
- S&P500 futures have witnessed a drop in their early gains, portraying negative market sentiment.
- The upside in the Loonie asset is capped around 1.3700 while the downside is restricted near 1.3500.
The USD/CAD pair has rebounded firmly after dropping to near 1.3550 in the early European session. The Loonie asset has sensed a decent demand as traction has shifted in the favor of safe-haven assets. Also, the US Dollar Index (DXY) has scaled to near the crucial resistance of 105.00, at the time of writing, as anxiety among market participants has soared ahead of the release of the United States Nonfarm Payrolls (NFP) data.
Gains recorded in the S&P500 futures in early Asia have trimmed significantly as investors are preferring in avoiding positions in the US equities till the release of the employment data for making informed decisions.
A scrutiny of USD/CAD on a four-hour scale indicates that the upside of the asset is capped around the horizontal resistance plotted from December 7 high at 1.3700 while the downside is restricted around the demand zone placed in a 1.3480-1.3500 range. The 50-period Exponential Moving Average (EMA) at 1.3567 is overlapping with the Lonnie price, which indicates a rangebound structure.
Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which signifies that investors are waiting for a fresh trigger for making positions.
Going forward, a decisive break above the December 16 high around 1.3700 will strengthen the US Dollar and will drive the Loonie asset toward October 25 high at 1.3748 and November 3 high at 1.3808.
On the contrary, the major could drop to November 23 high at 1.3440 after surrendering the psychological support of 1.3500. Later on, a slippage below 1.3440 will expose the Loonie asset for more downside towards December 5 low at 1.3385.
USD/CAD four-hour chart
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Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
