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USD / CAD recovery stops at 1.3260 and falls back to 1.3230

The US dollar has taken a break in the US session on Thursday after rising more than 0.6% so far today, fueled by risk-off sentiment. He USD / CAD it accelerated its uptrend after breaking above the 1.3160 ​​resistance area, to hit one-week highs at 1.3260 before falling back to 1.3230.

The US dollar appreciates in a session of risk aversion

The dollar is outperforming its major peers on Thursday, favoring its safe-haven status amid negative market sentiment. Investor concerns about the impact of tighter COVID-19 restrictions, with the pandemic rapidly spreading across the world’s major economies, and the improbability of a fiscal stimulus deal in the US are curbing appetite for the risk.

On the macro front, US data has failed to cheer markets up. Weekly jobless claims rose 53,000 to 898,000 last week, beating expectations of 825,000 claims and showing that the job market recovery is losing momentum. Additionally, an indicator of New York’s manufacturing activity has deteriorated beyond expectations in October.

USD / CAD: Limited below Fibonacci retracement at 1.3260

The USD / CAD has found resistance at 1.3260, right where the 50% Fibonacci retracement of the decline of the last two weeks is located. Above here, the pair would confirm the breakout of the short-term downtrend and target 1.3340 (October 7 high) before testing September highs at 1.3420.

On the downside, USD / CAD could find support at the 50-day SMA, now 1.3210. Below there, the next potential support levels would be at 1.3145 (intraday low) and 1.3100 (Oct 12 low).

Credits: Forex Street

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