The USD/CAD currency pair appears to be losing its bearish momentum this week ahead of the upcoming Canadian employment data. The weak bearish momentum also comes in the wake of reports that governments across the world plan to ease lockdown measures to facilitate business reboot.
Time : 06-05-2020
Pivot : 1.4053
Technical View : Short below 1.4033
Target : 1.4013, next 3 targets 1.3996, 1.3961 and 1.3919
Comments : Weak Bearish
Last Price : 1.0813
The USD/CAD exchange traded at around the 1.4053 level on the Pivot indicator which was short below the 1.4033 level, thus indicating weak bearish performance. The price level did manage to reach the Pivot level 1.4013 before retracing and has since then traded above that price target, thus indicating that the bears were unable to push further below.
Eased business restrictions amid COVID-19 are fueling bullish momentum
The weak bearish momentum in the USD/CAD exchange rate highlights the fact that traders are shifting towards bullish sentiments. This is likely because governments, especially in Canada and the U.S, are planning to ease their lockdown measures which will translate to more businesses resuming their operations. This means that people will be able to get back to work and the economic wheel will start to gain momentum. In other words, the demand for products and services will be on the rise as things get back to normalcy.
Investors are bullish on the Canadian dollar with the hopes of things returning to normalcy. This is because the Canadian dollar’s performance is heavily influenced by the performance of the oil industry since Canada’s economy is heavily influenced by oil production as one of the biggest oil-producing countries. Resuming businesses translate to improved oil prices and thus some gains for the CAD.
The Canadian Dollar’s bullish attempts might be watered down by unfavorable employment data
The Canadian dollar’s bullish momentum might be held back by the upcoming Canadian employment data. Analysts expect the data to highlight the biggest employment decline in half a century on account of the coronavirus. Such news will likely create more friction preventing the CAD bulls from pushing the USD/CAD currency further up. However, the currency pair will likely recover after that with the expectations of economic recovery.