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)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.