USDCAD jumps to test weekly highs around 1.3400

  • November 18, 2022
  • Canadian dollar among worst performers of the American session.
  • USDCAD with a bullish tone, about to break 1.3400.
  • Crude Oil tumbles by more than 4%.

The USDCAD is rising sharply during Friday’s American session. It recently hit a fresh daily high at 1.3398 and then pulled back modestly. It is looking at the 1.3400 area, with a bullish tone as Crude Oil tumbles and the US Dollar recovers.

Context favors the US Dollar

Data released in Canada showed the Industrial Product Price Index rose by 2.4% in October above the 0.4% expected. The Raw Material Price Index increased 1.3%, against expectations of a flat reading. The numbers, however, did not help the Canadian Dollar.

Equity prices in Wall Street are trimming gains as Crude Oil prices tumble by more than 4%. At the same time, the US Dollar is strengthening as market sentiment deteriorates and as US yields remain in positive territory.

The context is boosting USDCAD that is testing the 1.3400 area that capped the upside on Thursday. A break higher could open the doors to the next resistance level seen at 1.3460. If the Dollar fails here, a slide back to 1.3300 over the next sessions seems likely. Interim resistance is located at 1.3355.

The USDCAD is about to end the week with a gain of more than 100 pips, ending a five-week negative streak. Prices rebounded from the lowest level in months and also from the 20-week Simple Moving Average.  A weekly close below 1.3250 should point to more declines.

Technical levels