USD/CAD rises further to test 1.3400 on US dollar strength

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  • A stronger US dollar boosts USD/CAD to the highest level in a week. 
  • Greenback’s on demand and fully recovered from yesterday’s losses. 

The USD/CAD pair rose further during the US session and reached at 1.3398, the highest level since March 12. From the top pulled back modestly and as of writing was trading at 1.3375, consolidating a daily gain of 75 pips. 

The greenback is sharply higher across the board today while the Loonie is among the worst performers. Not even a stabilization of the WTI barrel near $60.00 and better-than-expected Canadian data were able to help the Loonie. The US dollar appears to have left behind the weakens that followed yesterday’s FOMC meeting. Data released today from the US, showed a rebound in the Philly Fed back into positive territory. On Friday, the key report for the pair will be inflation data from Canada. 

USD/CAD Breaking key technical level 

Yesterday after the FOMC meeting USD/CAD approached the 1.3250 support area and bounced to the upside. The rebound continued today and was strong enough to push the price above a key short-term resistance seen around 1.3365/70 that capped the upside last week. If the US dollar manages to hold on top, the outlook would point to further gains. The next resistance above 1.3400 is seen at 1.3415/20. 

On the downside, a retreat back below 1.3360 would put the price back on the previous range between 1.3360 and 1.3250. But technical indicators are biased to the upside at the moment. 

 

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