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The USD/CAD drifted lower on concerns that the pandemic counts in the US may force damaging economic closures in some states and could induce the Federal Reserve to further loosen credit. Technical indicators point lower, but none are convincing for a sustained move, FXStreet’s Analyst Joseph Trevisani reports.

Key quotes

“For most US dollar based pairs, the advantage will lie with the American economy’s historically better growth. That might not be as true for the USD/CAD as the initial stage of a worldwide recovery will play to its resource economy.”

“Technically, all indicators point lower for the USD/CAD but there are all weak. The descending channel is intact and well-defined with substantial room to the borders above and below the market level. Resistance lines at 1.3150 and 1.3200 and support at 1.3050 and 1.3000 are close as the market has run out the logic for a move in either direction.”

“The COVID-19 drama has dominated markets for nine months. The end appears to be in sight but it is, for the moment, too far for practical market planning. After this dismal year, traders will wait for concrete signs of improvement before they put their hopes into market positions.”

 

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