USD/CAD – Oil Sell-Off Lifts US Dollar Off Lows, Further Recovery Seen

The US Dollar rallied off its overnight and 2.1/2-month lows against the Canadian Loonie at 1.37280 to finish at 1.3765 in New York from 1.3780 yesterday.  The sell-off in Oil prices weakened the Canadian Dollar against its US counterpart. Earlier in the week, outgoing Bank of Canada Governor Stephen Poloz said that “if further monetary stimulus is required to meet our inflation targets, the bank has tools available to deliver that stimulus.” Which saw the USD/CAD pair plunge from 1.40 to last night’s low.

FXEmpire USDCAD Chart - 28 May 2020
FXEmpire USDCAD Chart – 28 May 2020

USD/CAD has immediate support at 1.3730 followed by 1.3700. Immediate resistance can be found at 1.3790 and 1.3820. The next resistance level lies at 1.3850. The Canadian Dollar will weaken if the sell-off in Oil prices and Asian currencies (led by the Chinese Yuan) continue. Look for consolidation in the USD/CAD pair with a likely range today of 1.3740-1.3840. Prefer to buy dips today.

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