Canadian Dollar Retreats to 1.3025 and dropped back to test Monday’s low at 1.3003 levels. What can traders expect next?
18 September, OctaFX – The USDCAD pair turned negative for the first time in four days, as a recovery in the risk sentiment following the US tariffs announcement boost the higher-yielding currencies such as the CAD at the expense of safe-haven US dollar.
Canadian Dollar Retreats to 1.3025
The spot faded its recovery near 1.3065 region and dropped back to test Monday’s low at 1.3003 levels, as the Loonie regained poise, tracking the bounce in its peers, the Aussie and the Kiwi. However, the CAD remained the weakest among all the commodities-currencies, as the negative sentiment around the US oil kept a check on the upside.
The major also came under renewed selling pressure after the US dollar remains broadly undermined, as markets had already priced-in the US tariffs announcement on the Chinese imports. The US imposed 10% tariffs on an additional $ 200 billion worth of Chinese imports.
Meanwhile, the conciliatory comments from the Chinese Commerce Ministry on the US-China trade talks helped the risk currency CAD stage a tepid recovery against its American rival. China Commerce Minister: There is no winner in a trade war, cooperation is the only correct choice
Attention now turns towards the Canadian manufacturing sales release and the sentiment on the Wall Street for fresh trading momentum.
USDCAD Technical Levels
“USDCAD pair has a strong support at 1.2975/80 (last week lows). A break lower could clear the way to a slide to 1.2935 (intermediate support might be seen at 1.2960). On the upside, immediate resistance might be seen at 1.3025/30, followed by 1.3055 (Sep 14 high) and 1.3075/80 (Sep 12 high),”
FXStreet’s Analyst Matias Salord noted.
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