Intraday bias - Neutral
USDCAD trades higher for a second consecutive week after a 750 pips sell-off. The weak crude oil price and board-based US dollar buying put pressure on the Canadian dollar at higher levels. The dollar index gained momentum after hawkish comments from Louis Fed president James Bullard. US existing home sales dropped for a ninth consecutive month to a seasonally adjusted annual rate of 4.43 million units. It hits an intraday high of 1.34400 and is currently trading around 1.34373
According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Dec increased to 80.6% from 75.8% a day ago.
Technically in the 4-Hour chart, the pair is holding above the short-term( 21- EMA), 55 EMA, and below the long-term moving average of 1.34875 (200- EMA). Any violation below 1.3370 confirms further bearishness. A dip to 1.3300/1.3230 is possible.
WTI crude oil dropped more than 17% in the past ten days due to increasing COVID cases in China and recession fears. Any daily close below $76 will push oil prices down to $70.
The near-term resistance support is around 1.3550 and any breach above targets is 1.1.3600/1.3500.
Indicators (4-Hour chart)
CCI (50)- Bullish
ADX- Neutral
It is good to buy on dips around 1.3400 with SL around 1.3360 for a TP of 1.3500.
