USD/CAD: massive sell-off

USD/CAD: massive sell-off

2020-08-18 • Updated

The pair slumped to levels unseen since January. What’s next?

Fundamentals

The most obvious reason why USD/CAD has dropped so much is the weak US dollar. The uncertainty over the next US fiscal stimulus package, decreasing US Treasury bond yields and the current risk-on sentiment weighed on the greenback. What’s interesting is that even the recent resignation of Canadian Finance Minister Bill Morneau didn’t have any impact on the loonie.

Pay closer attention on two significant economic releases on Wednesday: the OPEC meeting and FOMC meeting minutes. They may add some volatility to the Canadian dollar. OPEC members will discuss further cuts of the oil supply. In fact, Canada is one of the largest oil producers in the world. Therefore, any changes in the oil market will influence the loonie. Moreover, the Fed will unveil the detailed report of its last meeting the same day on the evening.  Analysts anticipate that the Fed’s dovish tone may push the USD down even more.

Technical tips

On the daily USD/CAD chart we can notice that the pair has entered the descending channel. If it slumps below the support level at 1.311, which it has touched several times, it may drop deeper to the low levels of January at 1.3035. On the flip side, if it jumps above the high of August 6 at 1.3320, it may surge to the high of the end of July at 1.3415.

Follow OPEC meeting and FOMC meeting minutes on Wednesday!

USDCADDaily.png

TRADE NOW

Similar

Latest news

Gold: trade the sideways move
Gold: trade the sideways move

How to trade the gold price while it's oscillating between 1 837 and 1 864? Read the article, and you'll know how!

Deposit with your local payment systems

Learn more

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera