The USDCAD appears to be headed for its 2019 low of 1.2950

The US Dollar was bearish against most of its major pairs on Thursday with the exception of the NZD. On the U.S. economic data front, Initial Jobless Claims rose to 1,106K for the week ending August 15th (920K expected), from a revised 971K in the previous week. Continuing Claims declined to 14,844K for the week ending August 8th (15,000K expected), from a revised 15,480K in the week before. The Leading Index increased 1.4% on month in July (+1.1% expected), compared to a revised +3.0% in June.

On Friday, Markit's U.S. Manufacturing Purchasing Mangers' Index for the August preliminary reading is expected to rise to 52.0 on month, from 50.9 in the July final reading. Markit's U.S. Services Purchasing Mangers' Index for the August preliminary reading is expected to increase to 51.0 on month, from 50.0 in the July final reading. Finally, Existing Home Sales for July are expected to spike to 5.40M on month, from 4.72M in June.

The Euro was bearish against most of its major pairs with the exception of the NZD and USD. In Europe, the German Federal Statistical Office has posted July PPI at -1.7% (vs -1.8% on year expected).

The Australian dollar was bearish against most of its major pairs with the exception of the NZD and USD.

The USD/CAD fell by 27 pips during Thursday's trading session. The currency pair has been falling inside of an descending wedge pattern that closely resembles a bearish channel since mid to late-March, after the U.S. Federal Reserve announced its unlimited quantitative easing initiative. The pair is currently holding just below the upper trend line of the pattern. The RSI is bearish and currently sitting at 35. The pair is likely to continue grinding lower toward the 1.3035 support level. If price breaks below 1.3035, it will likely carry on lower to retest the 2019 low of 1.2950. If price turns up, traders can look to the upper trendline as strong resistance. If price breaks above the upper trendline, then the pair will probably find resistance at 1.3355 before turning back down. If price breaks above 1.3355 it could mean the start of a new uptrend. However, the massive quantitative easing program used by the Fed will likely keep the U.S. Dollar Currency Index depressed as a result of inflation.


Market chart showing performance of USD/CAD. Published August 2020 by FOREX.com

Source: GAIN Capital, TradingView
Related tags: CAD Forex USD Trade

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