Chart of the day: USDCAD
A stellar jobs report and lower than expected unemployment provided little relief to a weakening Canadian dollar (CAD) as the USD continues to strengthen amid virus uncertainty.
Despite Canada’s unemployment rate coming in 0.2 of a percentage point lower than expected on Friday (5.5% vs 5.7% expected), the CAD went on to close at a two-month low.
There’s strong horizontal resistance seen at the 1.3340 level, and I expect USDCAD to move higher and test resistance as the greenback continues to drive higher. Of course, how price behaves into this supply zone is key. A mix of coronavirus fears and US data relative outperformance is driving investors to the USD as a safe haven.
Commodity currencies continue to drive lower amid the coronavirus outbreak, while the US continues to relatively outperform - the CAD is no exception. It’s status as a petro-currency weighs heavier again as oil prices continue to drop in response to China’s virus quarantine and reduced travel.
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