USD/CAD sustaining weakness below 200-DMA

Haresh Menghani FXStreet

Having faced rejection near 1.3300 handle in the previous session, the USD/CAD pair came under additional selling pressure on Thursday and plunged below 1.3100 handle.

Currently trading around 1.3060-55 band, off around 25-pips from session low, the pair early dropped to test its lowest level since Oct. 19 amid persistent US Dollar weakness on fading optimism surrounding President-elect Donald Trump's economic stimulus plans. Trump failed to provide any details of his probable policies, which had been a key factor underpinning the greenback rally since the US-presidential election.

Adding to this, buoyant sentiment around oil market, with WTI crude oil extending the rebound from Wednesday's sub-$51.00 level, is further lending support to the commodity-linked currency - Loonie, and collaborating to the strong selling pressure around the major.

In absence of any major market moving releases, with the only scheduled release of usual weekly jobless claims data from the US, investors would now scrutinize comments from various Fed members, including the Fed Chair Janet Yellen, in order to gauge possibilities and timing of next Fed rate-hike action, which would eventually determine the next leg of directional move for the greenback.

Technical levels to watch

Weakness below session low support near 1.3030 region could get extended towards 1.3005 (Oct. 19 low) below which the pair is likely to accelerate the slide further towards its next support near 1.2960 horizontal zone.

On the upside, any recovery attempt above 1.3075 level might now confront resistance at 200-day SMA important support break-point, now turned resistance, near 1.3095-1.3100 region. Momentum back above 200-day SMA is likely to trigger a short-covering bounce towards 1.3175-80 resistance, with 1.3150 level acting as intermediate resistance.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.3297

75% Bullish
12% Bearish
12% Sideways

Bias Bullish

1 Month

Avg Forecast 1.3365

73% Bullish
18% Bearish
9% Sideways

Bias Bullish

1 Quarter

Avg Forecast 1.3469

67% Bullish
20% Bearish
13% Sideways

Bias Bullish

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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