The US Dollar gained momentum against the Canadian Loonie after trading sideways between 1.3450 and 1.3650 for the past two weeks. USDCAD soared on Friday to an overnight high at 1.34156 before closing in New York at 1.3690 (1.3645 Friday morning). Risk aversion spurred on by the unabated rise in Covid-19 cases in the US and other hotspots around the world kept the USDCAD pair bid. Last week markets shrugged off rating agency Fitch’s downgrade of Canada’s sovereign credit rating from AAA to AA.
USDCAD has immediate resistance at 1.3720 followed by 1.3750 and 1.3800. Immediate support can be found at 1.3670 and 1.3620. This morning’s news on China’s latest shutdown due to a new Covid-19 cluster and the rising number of cases in some US states will keep the USD/CAD pair supported. With risk-off dominating sentiment, look for USD/CAD to trade higher in a likely range today of 1.3670-1.3820. Look to buy on dips.