Canadian Dollar Update, February 9, 2021 – Canadian dollar finds its footing
USD/CAD Open: 1.2731-35, Overnight Range: 1.2715-1.2740, Previous Close: 1.2740
WTI Oil is at $58.00 and gold is at $1,841.83. US markets are mixed today.
For today, USD resistance is at 1.2707. Support is at 1.2681.
-Risk sentiment stays positive
-Oil prices continue to climb on global economic recovery hopes
-Canadian dollar rises as US dollar slides against G-10 majors
The Canadian dollar is trading firmer, as it rides another positive risk sentiment wave. There wasn’t much in the way of actionable economic data overnight, FX leaving traders to find direction elsewhere. They found it in the cryptocurrency space. Bitcoin (BTCUSD) soared overnight, rising to $48,000. It was $38,000 yesterday. Prices soared after Tesla announced it had bought $1.5 billion. Some analysts believe that other large investors will follow Tesla’s lead.
The Canadian dollar is benefiting from bearish USDCAD technicals. They suggest that the break below 1.3055, which is the 61.8% Fibonacci retracement level of the September 2017-March 2020 USDCAD range, point to further losses to 1.2675. The intraday technicals are also bearish and looking for a break of USDCAD support at 1.2710 to target 1.2550.
Global FX sentiment is positive due to elevated expectations for a robust post-pandemic, global economic boom as vaccine roll-outs allows economies to reopen. The Canadian dollar is benefitting from that sentiment even though Canada’s recovery is likely to lag that of other nations.
Yesterday, Cleveland Fed President Loretta Mester repeated the FOMC mantra that US monetary policy would remain unchanged until the economy recovers from the pandemic. She added that reducing the level of support will not happen soon.
EURUSD rallied to 1.2116 from 1.2046 overnight but has since slipped to 1.2097, in part because US equity futures have pared gains. The gains occurred on the heels of dropping numbers of new coronavirus cases world-wide, even though Europe still has major virus issues, including a botched vaccine roll-out. The EURUSD technical picture turned positive with the break above resistance at 1.2070.
GBPUSD continued to drive higher touching 1.37888, as the currency continues to benefit from last week’s Bank of England monetary policy announcement.
The BoE issued a rather positive outlook for the domestic economy and appeared to dispense with the notion of negative interest rates in the near future. Britain is well ahead of its G-10 competitors in the vaccination race, which suggests its economy will rebound quicker than others.
There are not any US or Canadian economic reports of note available.
Traders will take direction from bond, and equity markets while watching the Trump impeachment rial.
Today’s Suggested Range USD/CAD: 1.2680 – 1.2780