The US Dollar is trading at 1.28 against the Canadian Dollar, down -0.26% with a YTD return of -0.87%. The pair’s open rate of 1.2908 is the same as the previous close and the daily range should stay between 1.28 and 1.29. The 52-week range is expected to move between 1.26 and 1.46.
Since the release of COVID-19 vaccinations, the USD has slowly been trying to recover from the lowest exchange rates seen all year. For the last month, the currencies’ rate has remained below the 1.30 support level causing bearish traders to take a step back to look at the bigger picture for 2021.
The last time USD/CAD had an exchange rate this low was in January but the recovery should keep prices within a broad downtrend, traders will be “looking for a more significant inflection in price on a stretch higher into yearly open resistance” DailyFX reported.
After plummeting into the December open, USD/CAD “has rebounded off downtrend support with the recovery now approaching multi-month downtrend resistance.” At this point traders are looking to reduce long-term exposure to the pair taking a bearish approach until it is clear is a loonie price reversal is underway.
Throughout December it has been clear that traders are net-long which suggests that USD/CAD prices will continue to plummet; “traders are more net-long than yesterday” but less than last week. The current positioning in the market and recent economic changes both provide “a further mixed USD/CAD trading bias from a sentiment standpoint.”
By Surina Nath