Forex USD/CAD

USD/CAD: Further declines ahead as underlying advantages for the loonie remain

USD/CAD rebounded from Thursday's two-and-a-half year low at 1.2688, closing the week at 1.2781. However, several fundamental trends support continuing gains for the Canadian dollar while technical indications point down as well, according to FXStreet’s Analyst Joseph Trevisani.

Key quotes

“The fundamental inclination of the USD/CAD is lower, based on rising commodity prices as the global economy reignites, market disappointment with the US recovery and the lack of additional American stimulus.”

“The Fed's control of US credit markets and the extension of zero rates until the economy is ‘fully recovered’ prevents what would be their anticipatory rise well before the US and global return to normal growth.”

“Except for the immediate support lines at 1.2730 and 1.2700 all deeper lines stem from the first half of 2018 and are weak thereby. Resistance lines are based on positions and trading of the past months and the current economic and virial realities.”

 

Thank you. I bought and it flew off 200 pips. Post more.

 

There was a beautiful double bottom on the 1H timeframe that like you wrote, suggested a reversal on an important support zone.


USD strength is fundamentally explained by risk aversion with the "new coronavirus" from London with lockdowns.