The US Dollar grinded higher against the Canadian Loonie as risk aversion hit FX with the spike in new Covid 19 cases. Reports of increasing infections in several US states such as Texas, Arizona and Florida, the reintroduction of travel restrictions in Beijing as a result of a new outbreak and the latest report of 2 new cases in New Zealand where none existed in the past 24 days weighed on risk appetite. This outweighed the positive news of a slowing rise in coronavirus death rates and the desire of global central banks led by the US Fed to provide fresh stimulus to keep the economic recoveries moving. A drop in Canada’s inflation rate also weighed on the Loonie.
USD/CAD closed at 1.3565 from 1.3545 yesterday. Immediate resistance lies at 1.3600 (overnight high traded was 1.35944). Immediate support can be found at 1.3530 followed by 1.3500 and 1.3470. Look for consolidation today in a likely range between 1.3530 and 1.3630. Prefer to buy dips with a topside break likely.