Economy Forex

USD/CAD remains bearish near weekly lows around 1.2650

  • USD/CAD came under renewed selling pressure on Thursday amid widespread USD weakness.
  • Bulls seemed rather unimpressed by falling oil prices, which tend to undermine the Canadian dollar.
  • Disappointing US jobless claims offset dismal Canadian retail sales and did little to provide support.

USD/CAD maintained its heavily offered tone near weekly lows around the 1.2655-60 area and could not get any respite for the dismal Canadian macroeconomic data.

The pair experienced aggressive selling on Thursday and retreated from its one-month highs reached on the first day of the current week, or 1.2900. As a result of broad-based weakness in the US dollar, the dollar experienced its third consecutive day of losses.

USD/CAD

MetaNews.

The Fed indicated Wednesday that it will likely begin tapering its monthly bond purchases towards the end of the year. Some investors, however, were disappointed by this statement, as they had expected the withdrawal of the large stimulus measures associated with the pandemic.

Furthermore, the key USD index erased the previous day’s hard gains to one-month highs sparked by a prevailing risk-off mood. In large part, this offset a modest intraday drop in oil prices, which tends to undermine demand for the commodity-linked Canadian dollar.

In spite of disappointing domestic retail sales figures, the Canadian dollar maintained its strong intraday gains against its U.S. counterpart. Statistics Canada reported July retail sales contracted by 0.6%, falling far short of predictions for growth of 4.4%.

According to consensus estimates, retail sales in Canada, excluding autos, fell 1% during the reported month. A larger part of the data was offset by an unexpected increase in US Weekly Initial Jobless Claims from 335,00 to 351,000 from the previous week.

In the meantime, we expect further losses in USD/CAD due to its inability to find buyers. Accordingly, the RSI (14) on the 1-hour chart already indicates intermittent oversold conditions, so it is prudent to wait for some consolidation or a modest bounce before positioning for further depreciation.

Avatar

Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
Follow Me:

Related Posts