USD/CAD proceeds its longer-term downtrend with the Loonie among only a handful of currencies able to better a resurgent US buck . The year-long sell-off from the mid1.40s is starting to slow down using the pair today in the middle of a four-month array between 1.2360 and 1.2950 and it will call for a powerful driver to break from this zone in the short- to medium-term.
This week’s OPEC+ meeting is expected to see current output rates left untouched as a result of ongoing spread of covid-19 as well as the exerts influence on the international economy. On Thursday, OPEC+ revised down petroleum demand quotes from 5.9 million bpd to 5.6 million bpd, imagining’a growing number of supported Covid-19 infections internationally’ with lockdown steps increased and reimposed’in many areas’. OPEC will seem to further run down oil supplies before the next meeting in May, giving the cartel time to see the effectiveness of the new pandemic measures. This should anchor the purchase price of oil for the next month, bolstering the Canadian dollar.
In the short term, USD/CAD will be looking to break out of a 20- and – 50-day sma pincer movement with the pair stuck between the two for the previous week. The 20-dsma is currently acting as support approximately 1.2534 while the 50-dsma is at 1.2621, leaving the pair stuck in a narrow range. The downtrend now remains in place with a number of lower highs over the chart since early 2020, while a break below 1.2365 is needed to earn a new lower low to validate ongoing weakness.
G Retail trader data reveal 56.48% of traders are net-long using the proportion of traders extended to short at 1.30 to 1. We typically take a contrarian view to crowd sentiment, and also the fact traders are net-long suggests USD/CAD prices may continue to fall.Yet traders are significantly less net-long than yesterday and compared with last week. Recent changes in opinion warn that the current USD/CAD price trend may soon reverse higher despite the fact traders remain net-long.
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