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Market News The US dollar against the Canadian dollar rose to a new one-month high and is expected to break through the 1.29 mark

The US dollar against the Canadian dollar rose to a new one-month high and is expected to break through the 1.29 mark

A series of factors continued to push the US dollar against the Canadian dollar higher for the third consecutive day. The overall strength of the U.S. dollar and continued decline in oil prices still supported the strong rise in exchange rates.

2021-09-20
7470
On Monday (September 20), the US dollar against the Canadian dollar continued to rise in European midday trading and climbed to a new one-month high above 1.2850 in the past hour.


Against the backdrop of expectations that the Federal Reserve will soon announce a reduction in the scale of bond purchases, the strong sell-off of global stock markets has boosted the safe-haven US dollar. In addition, the sharp drop in crude oil prices weakened the Canadian dollar, which is related to commodities, and pushed the U.S. dollar to the Canadian dollar higher for the third consecutive day.

From a technical point of view, last Friday's continuous breakthrough of the weekly trading range was seen as a key factor that triggered the accelerated entry of bulls, and triggered strong follow-up buying on the first day of the new week. The subsequent strength surpassed the volatility high of the previous month and the 1.2800 mark, which has laid the foundation for further gains.

The fact that the technical indicators of the daily chart have received positive traction strengthens the constructive outlook. But the relative strength index (RSI) on the hourly chart has already shown overbought status, and you need to be cautious before making new bullish bets.

Nevertheless, the US dollar against the Canadian dollar seems to climb further to the 1.2900 psychological mark, and even near the 1.2949 level of the year's high hit on August 20. Concerns that the Canadian federal election may lead to a deadlock may continue to be detrimental to the Canadian dollar and increase the credibility of a bullish tendency.

On the other hand, a pullback below the 1.2830-25 area should find a good support near 1.2800. If it breaks further below the 1.2765-60 area, it should be considered a buying opportunity. This, in turn, should help limit the downside of USD/CAD to around 1.2700, the resistance level of the previous trading range.

(Daily chart of USD/Canadian dollar)

At 20:44 GMT+8, the U.S. dollar was quoted at 1.2857 against the Canadian dollar.
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