Chart of the Day: Spot USD/CAD (14/08/2020) | alb.com
The Dollar Index appears to be trading within a range, unable to close below the swing low at 93.13 made on 11/08/2020 or the swing high made on 12/08/2020 at 93.88. As a result, this has created a tighter range between 93.15 to 93.60 and I anticipate the Dollar Index will continue to trade within this narrow range until we get clarity with regards the stimulus package. Although initial jobless claims was better than expected, the U.S. currently has over 30 million unemployed and the coronavirus remains a major concern. Until both factors are resolved, it is very likely we swill see a very sluggish economic recovery.
The price of the USDCAD is holding above its 200 weekly moving averages and the trendline drawn from 03/09/2017 connected to the swing low made on 29/121/2019 at 1.29514 and projected forward intersects in the region of the weekly 200 moving averages adding additional confluence. The swing low made on 21/02/2020 at 1.32018 appears to provide strong support as we have seen price rally significantly from this level and in yesterday’s trading, price retested this level and close above it suggesting buyer interest rests around 1.3200. Therefore, I anticipate in the short term some bullish activity on the USDCAD, where there is likelihood of moving towards 1.3316. However, along the way, particularly in the shorter time frame we have overhead resistance arising from the 9, 20, 50 and 200 moving averages.
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