USD/CAD lingers at two-week lows as the loonie holds firm on the day

Technical Analysis

Author: Justin Low | usdcad

The Canadian dollar is the strongest performing major currency on the day so far

USD/CAD D1 20-02
ForexLive
USD/CAD is hovering around the lows for the day as price settles at levels last seen on 6 February with support around 1.3180 helping to keep the pair afloat for the time being. The near-term bias in the pair is favouring sellers at the moment and with price falling below the 100-day MA (red line) in trading yesterday, sellers are continuing the momentum to the downside in trading today.

The key level that sellers will be aiming for will be the 200-day MA (blue line) @ 1.3152. A firm break below that will see momentum in the pair turn more bearish. That said, the upwards trendline since February last year is still holding up so that will also be a key technical level that sellers must breach before seeing a solid run to the downside.

With risk sentiment not providing much clear direction on the day, the next key risk event for the pair will come from the dollar side of the equation via the January FOMC meeting minutes release. Look towards that for more clues on which direction the pair will adopt in the near-term.

For now, sellers are prevailing but there is a need for further conviction to make a run lower here. Support is seen @ 1.3180 followed by 1.3160-65 and then the 200-day MA. Meanwhile, buyers need to build back towards a move above the 100-day MA @ 1.3251 to retest resistance around 1.3300 and 1.3320-40.

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