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USD/CAD Price Analysis: Losing streak extends for fourth session

  • USD/CAD continues to fall to 1.3720 as Canadian Dollar remains strong despite weak oil prices.
  • This week, the US core PCE price index and first quarter GDP data will guide the US dollar.
  • The pair corrects after a strong rally, driven by the breakout of an ascending triangle.

The USD/CAD pair continues its bearish streak for the fourth consecutive session. The Canadian Dollar asset falls to 1.3720, as investors have supported the Canadian Dollar against the US Dollar despite multiple headwinds.

The Canadian Dollar maintains its strength even as the price of oil plummets below $81.00. The attractiveness of the oil price weakens as geopolitical risks diminish following Friday's events in the Middle East, which indicated that Iran was downplaying Israel's limited retaliatory strike. Falling oil prices often dent demand for the Canadian dollar, as Canada is the largest exporter of oil to the United States.

Furthermore, the moderating outlook for Canadian inflation is failing to dampen the outlook for the CAD. The Bank of Canada's (BoC) preferred measure of inflation, which excludes eight volatile items, fell annually to 2% in March, raising expectations of a soon rate cut.

Meanwhile, the US Dollar consolidates above 106.00 as investors focus on preliminary first quarter Gross Domestic Product (GDP) data and March Personal Consumption Price Index (PCE), which They will be published on Thursday and Friday, respectively.

USD/CAD rose strongly after breaking the ascending triangle formed on the daily chart. The near-term outlook remains strong as the 20-day and 50-day EMA, trading around 1.3680 and 1.3600, respectively, move higher.

The 14-period relative strength falls to near 60.00, but still remains within the bullish range of 60.00-80.00.

Since a mild correction is usually followed by a strong rise after a breakout, a mean reversion move near the 20-day EMA around 1.3680 will present a buying opportunity for market participants. Investors would find resistance near the November 22, 2023 high at 1.3766, followed by the round level resistance at 1.3800.

In an alternative scenario, a break below the April 9 low around 1.3547 would expose the asset to psychological support at 1.3500 and the March 21 low around 1.3456.

USD/CAD daily chart

USD/CAD

Panorama
Today's Latest Price 1.3729
Today's Daily Change -0.0024
Today's Daily Change % -0.17
Today's Daily Opening 1.3753
Trends
20 Daily SMA 1.3641
SMA of 50 Daily 1.3569
SMA of 100 Daily 1.3495
SMA of 200 Daily 1.3529
Levels
Previous Daily High 1.3805
Previous Daily Low 1.3724
Previous Weekly High 1.3846
Previous Weekly Low 1.3724
Previous Monthly High 1.3614
Previous Monthly Low 1,342
Daily Fibonacci 38.2% 1.3754
Daily Fibonacci 61.8% 1.3774
Daily Pivot Point S1 1.3716
Daily Pivot Point S2 1.3679
Daily Pivot Point S3 1.3635
Daily Pivot Point R1 1.3797
Daily Pivot Point R2 1.3841
Daily Pivot Point R3 1.3878

Source: Fx Street

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