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USD/CAD drops to 3-month low and rebounds, back above 1.3700 mark

USD/CAD drops to 3-month low and rebounds, back above 1.3700 mark

  • USD/CAD comes under some fresh selling pressure on Monday amid sustained USD selling bias.
  • A modest pullback in crude oil prices undermined the loonie and helped limit any further losses.

The USD/CAD pair tumbled to near three-month lows, around the 1.3675 region in the last hour, albeit quickly recovered few pips thereafter.

Following the previous session's good two-way price moves, the pair came under some fresh selling pressure on the first day of a new trading week and broke below the 100-day SMA support near the 1.3700 mark. The downward trajectory was sponsored by the prevalent US dollar selling bias and seemed rather unaffected by a mildly weaker tone surrounding crude oil prices.

The greenback added to its recent losses and remained depressed amid rising optimism over the global economic recovery from the coronavirus pandemic. The upbeat market mood was further supported by the fact that the US President did not withdraw from the US-China phase-one trade deal in reaction to the dragon nation's move to tighten control over Hong Kong.
 

Adding to this, widespread riots in the US further undermined the USD demand, which turned out to be one of the key factors exerting some heavy pressure on the USD/CAD pair. However, a modest pullback in crude oil prices, now down around 1$ for the day, undermine the commodity-linked currency loonie and assisted the pair to quickly rebound around 50 pips.

The pair was last seen trading around the 1.3725 region, though lacked any strong follow-through. hence, any subsequent recovery move might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 1.3750 resistance zone.

Moving ahead, market participants now look forward to the US economic docket, highlighting the release of ISM Manufacturing PMI. The data might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session.

Technical levels to watch

USD/CAD

OVERVIEW
Today last price 1.3714
Today Daily Change -0.0071
Today Daily Change % -0.52
Today daily open 1.3785
 
TRENDS
Daily SMA20 1.3967
Daily SMA50 1.4039
Daily SMA100 1.3719
Daily SMA200 1.3458
 
LEVELS
Previous Daily High 1.3833
Previous Daily Low 1.3715
Previous Weekly High 1.4008
Previous Weekly Low 1.3715
Previous Monthly High 1.4173
Previous Monthly Low 1.3715
Daily Fibonacci 38.2% 1.3788
Daily Fibonacci 61.8% 1.376
Daily Pivot Point S1 1.3722
Daily Pivot Point S2 1.366
Daily Pivot Point S3 1.3604
Daily Pivot Point R1 1.384
Daily Pivot Point R2 1.3896
Daily Pivot Point R3 1.3958

 

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