The bears have prevailed for the USD/CAD exchange rate for the better part of Friday’s trading session after the previous weak bullish attempts on Thursday following the release of key market data for Canada and the U.S. The bearish performance also highlights the Canadian dollar’s rally over the U.S dollar before a highly anticipated OPEC meeting.
Before its downturn, the USD/CAD exchange rate had surged past the 1.4044 resistance level and then the bears took over, pushing down the price. The bearish momentum managed to break through the 1.3969 support level, as well as the 1.3941 support before more pullbacks. There were a few other bullish attempts with the price surging close to the 1.4044 resistance level.
The USD/CAD bearish performance indicates the Canadian Dollar’s gains against the U.S dollar which has taken place after unflattering U.S jobs report. The economic fallout caused by the coronavirus has largely affected the U.S job market leading to the loss of millions of jobs. This has subsequently affected investor sentiments and thus the U.S dollar’s weak performance. The Canadian job market also reported significant job losses and this also affected the CAD, thus helping to curb the bearish run.
The USD/CAD’s downturn may also be influenced by the expectations of improvements in the oil industry ahead of a major meeting between OPEC and its allies. Canada is one of the top oil-producing countries and its oil production contributes significantly to the performance of the Canadian economy. The oil industry also employs many Canadians.
Unfortunately, the oil industry has performed terribly over the past few weeks as oil prices plummeted globally. This has arguably affected the Canadian economy and thus the hopes that the situation will improve. The OPEC meeting is expected to yield positive results and thus the positive sentiments about the Canadian dollar’s performance on Friday. This has contributed to the CAD’s gains against the USD.