Canadian Dollar Update, July 28, 2020 – Canadian Dollar can’t get past 75 cents
USD/CAD Open: 1.3383-87, Overnight Range: 1.3331-1.3407
WTI Oil is at $41.12 and gold is at $1,946.80. US markets are lower today.
For today, USD resistance is at 1.3428. Support is at 1.3365.
• Canadian dollar rally stalls at 75 cents (75 US cents = 1 Canadian dollar)
• Gold prices retreat, after making another new high
• US stimulus debate and FOMC meeting limiting price action
Canadian dollar bulls attempted to charge through the 75 cent level (USDCAD 1.3333) but were not successful. USDCAD touched 1.3333 then bounced. Prices rebounded to 1.3400 in early Toronto trading, alongside similar price action in the antipodean currencies.
Traders were cautious, and markets were defensive overnight. The major Asia equity indexes closed with minor losses, and European equities flipped into negative territory, alongside a similar move in US equity futures. Stocks have enjoyed a profitable month, so month-end profit-taking is understandable.
However, it was the morning’s dip in stock prices that fueled US dollar demand, undermining the Canadian dollar in the process.
Gold has been getting a lot of attention. It rose over 34% since March and came within $20.00 of the psychologically important $2000.00/ounce level overnight. XAUUSD peaked at $1981.20 then dropped to $1907.21 before recovering in Toronto, today.
EURUSD peaked at 1.1780 yesterday and has retreated to 1.1712 today. Profit-taking ahead of Wednesday’s FOMC meeting is on factor weighing on prices. However, the longer-term technicals are bullish, with plenty of buyers waiting for a dip, to buy the single currency, which may limit losses.
USDJPY took out support at 106.10 and then 105.50, turning sentiment bearish and targeting further losses to 103.30. Prices are undermined by weak US Treasury yields and safe-haven demand for yen due to geopolitical tensions. China continues to snipe at critics of its virtual annexation of Hong Kong.
Traders are keeping an eye on reports about progress towards a coronavirus vaccine. That news is alleviating some of the negative growth concerns stemming from the resurgence of COVID-19 cases in the US.
The US data calendar lacks top tier reports. Consumer Confidence and the S&P Case-Shiller Home Priced index are due, but neither report will have any impact on FX markets.
Today’s Suggested Range USD/CAD: 1.3330 – 1.3430