USD/CAD – Loonie Rally Dented by Risk-Off, 1.3720 Base Forming

The Dollar closed little changed against the Canadian Loonie despite a bounce in Oil prices. Brent Crude Oil was 2% higher to USD 36.10 while West Texas Intermediate (WTI) gained 2.77% to USD 33.80. The USD/CAD pair closed at 1.3770 against yesterday’s 1.3765. Souring risk sentiment due to rising US-China tensions weighed on the Loonie. Overnight the USD/CAD slipped to a low at 1.37280 before rebounding to finish at 1.3775. The overnight high reached was 1.38223.

USDCAD Daily Chart - FXSTREET - 29 MAY 2020
USDCAD Daily Chart – FXSTREET – 29 MAY 2020

Today sees a plethora of Canadian economic data released. Canada’s March GDP number which captures the start of the lockdown is expected to slump to between -9.0% to -10% from February’s 0.0%. Any decline larger than 10% will see USD/CAD soar. A number less that -9.0% could see a dip back to the 1.3720 support. Any fall in risk sentiment from the US-China tiff will see a higher USD/CAD.

USD/CAD has immediate resistance at 1.3810 followed by 1.3850. Immediate support lies at 1.3740 and 1.3720. Look for a likely trading range today of 1.3750-1.3850. Prefer to buy dips.

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