- Steep rise in USD / CAD, which turns into positive territory for the week.
- Fall in stocks benefits the dollar as a refuge.
He USD / CAD extended the rise and climbed to 1.2711, the highest level in two days, rising 125 pips from Thursday’s low, when it operated at the lowest level in two and a half years.
A combination of factors drove the crossing. The most important is the sharp decline in equity markets, which favored demand for the dollar and weakened commodities, including oil. WTI loses 2.45% on Friday and is below $ 52.00.
The Wall Street futures point to a negative opening with falls on average of 0.70%. Risk aversion favors the dollar, but at the same time makes the loonie appreciate against the other commodity-linked currencies (AUD and NZD). The advance of coronavirus cases in the world and the announcement of restrictions in Beijing, triggered fears in investors about the economic consequences.
Facing the American session, what happens on Wall Street should be decisive for the USD / CAD. In addition, the November retail sales report will be published in Canada and the PMI Markit and the existing home sales report in the US.
From a technical perspective, USD / CAD continues with a dominant long-term downtrend, but in the very short term looks bullish, very close to the 20-day moving average at 1.2724, which may offer resistance, before at 1.2715, there is another resistance to keep in mind that if broken could give more strength to the upward movement. On the downside, at 1.2660 / 70 there is a relevant support, which if it were to give way would put the very short-term bias back in favor of the loonie.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
