The US Dollar slid to an overnight and near 2-week low at 1.39454 before bouncing to finish at 1.3995 in late New York trade as Brent Crude Oil prices slipped 1.85%. In early Sydney trade USD/CAD rose further to 1.4017 as risk appetite waned and stocks reversed gains to close in the red.
Overnight Canadian data saw Ivey Purchasing Manager’s diffusion Index slump to 26.0 in March from February’s 54.1 and widely missing forecasts at 50.1 A level below 50 indicates economic contraction. Meanwhile, the latest Commitment of Traders/CFTC report saw net speculative Canadian Dollar shorts reverse and turn long from -CAD 29,245 to +CAD 7,316. That’s a huge turnaround. Lower Oil prices will continue to weigh on Canada’s economy and the Loonie will struggle to rally against the Greenback.
USD/CAD has immediate support at 1.3975 followed by 1.3945. Immediate resistance lies at 1.4020 followed by 1.4080 and 1.4130. Look to buy dips with a likely range today of 1.3990-1.4120.