BUZZ-COMMENT-Major tipping point could decide loonie’s fate
Nov 23 (Reuters) – The Canadian dollar has held within a 1.3035 to 1.3122 range versus the U.S. dollar, but a fall to the 1.2928 November low is an increasing risk. That level is important because USD/CAD has little major support below until the April 2018 lows of 1.2528.
A shallow market bias has favoured the Canadian dollar in recent sessions, and as vaccine optimism becomes a major driver of commodity currencies the loonie should benefit further. The rally in oil prices on global growth hopes gives the energy-sensitive CAD room to play catch-up.
USD/CAD could go significantly lower, but while uncertainty remains surrounding global growth, the November low could attract profit-taking before another bear push sets in.
USD/CAD currently sits just below the 200-week moving average, 1.3158. The average has been flat-lining since June and looses significance as a result, but traders will still place importance on a topside break. That is the short-term technical risk to the CAD.
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USD/CAD daily candle chart: https://tmsnrt.rs/36UTZx6
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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