USDCAD under pressure as DXY weakens

USDCAD under pressure as DXY weakens

Key Resistance: 1.2550
Key Support: 1.2500 – 1.2450

The USDCAD rallied yesterday on the Bank of Canada monetary report and rate decision to keep it at 0.25% and continue its asset purchasing program.

This is bearish for the currency and the reason the USDCAD rallied.

In the long term, the USDCAD has dipped more than 18% from the pandemic highs to the lows of the long term move. From the lows of the move (1.20 level) it has rallied about 4.90% to a very thick key level. This is the level where we will see a lot of sellers jump in and yesterday´s spike on monetary policy report can be very short lived.

The DXY saw a very bearish day yesterday and has printed a new daily low with price testing the weekly pivot. Today the DXY retested the previous broken key level (92.50) and continued its move down signaling a bearish continuation.

The USDCAD has failed 4 times already to break above the 1.2560-1.2590 level which indicates heavy selling pressure here.

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Author : Orlando Gutierrez

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