USD/CAD – Risk-On Lifts the Loonie, Lower Oil weighs, 1.3980-1.4130 Likely

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.

LiveCharts USDCAD - 1H - 08 April 2020
LiveCharts USDCAD – 1H – 08 April 2020

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.

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