By Ketki Saxena
Investing.com -- The Canadian dollar touched an eight week high against its US counterpart, supported by an uptick in risk-on sentiment, gains in crude prices, and general weakness of the US dollar.
The US dollar fell against a basket of major currencies as US Treasury yields retreated, after Fed Governor Christopher Waller brought up the possibility of rate cuts in the months ahead.
Despite the dollar’s easing against the loonie, analysts at Monex Canada note that “the USDCAD is still likely to end the week higher than it started”, on the back of Canadian GDP and Labour market data.
The analysts “Continue to expect that both the growth and employment figures will indicate an economy teetering on the brink of recession, accelerating BoC easing calls. Ultimately this should see USDCAD retracing higher towards the key 1.40 resistance level.”
US Q3 GDP second estimate is also due tomorrow, but the impetus on the USD/CAD pair is likely to be limited unless there is a revision to the first estimate.
On a technical level for the pair, analysts at Daily FX note, “USDCAD finally broke the ascending trendline which had been in play since July. Having broken the trendline Monday did present a retest opportunity before a further selloff today bringing USDCAD within touching distance of the 100-day MA.”
“There is the possibility of retracement from here before resuming its move to the downside and the 1.3500 psychological level. If price is able to break above the psychological level then support rests at 1.3450 and 1.3370 respectively.”