- USD / CAD hits a new weekly high at 1.2630.
- Risk market sentiment weighs on the loonie.
USD / CAD is up for the second day in a row, growing 0.35% on the day at 1.2614, leaving the 200-day moving average behind. Previously, the pair recorded a new high for the week at 1.2630.
The general tone in the markets is cautious, spurred by the escalation of the Afghan conflict, hungry fears and China’s adjustment of regulations towards Internet companies. These conditions kept investors uncomfortable, prompting flows to safe haven assets.
Earlier in the day, figures for Canadian home starts were released. The readings were worse than expected at 272,200 versus the estimated 80,000. Meanwhile, in the United States, retail sales fell 1.1%, compared to the 0.3% expected by the market. There was no market reaction to this data.
USD / CAD technical perspectives
The Loonie is trading at 1.2615 up 0.33%, above the 200-day moving average of 1.2560, so it looks like there could be an uptrend. This challenges the downward sloping trend that starts from March 2020 highs around 1.4600 to June 2021 lows around 1.2000. As prices rise, the next resistance level is 1.2700, followed by the July 19 high at 1.2807, then the June 28 high at 1.2881. The short-term trend is tilting upward. The DMA of 50 is between the DMA of 200 and the DMA of 100 with an upward slope, approaching 1.2450.
The RSI is at 59.38 and rising modestly, while the Average True Range (ATR) is 77 pips and rising.
Resistance: 1.2700, 1.2807, 1.2881.
Support: 1.2560 (200 DMA), 1.2500, 1.2474 (July 30 low)
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