USD/CAD's rebound from 1.3520 lows extends beyond 1.3600
- US dollar rebound from 1.3511 extends to levels past 1.3600.
- The dollar appreciates on risk aversion and to pare losses after a weak day opening.
- Longer-term, the USD remains trading below downward trending resistance.
The US dollar has gone through a steady uptrend against the Canadian dollar, bouncing at 1.3520 lows to reverse a weak opening and appreciate to levels past 1.3600.
The US dollar rallies on risk aversion
Market fears about the economic consequences of a second wave of COVID-19 infections have buoyed the US dollar against riskier currencies. The increase of infections reported in different US states and Beijing’s restrictions to control a new virus outbreak are dampening investor’s hopes of a quick recovery from the shutdown.
Macroeconomic data has passed practically unnoticed, with US indicators mixed on Thursday. Weekly jobless claims posted a 1.5 million increase in the week of June 12, while, on the positive side, the Philadelphia Manufacturing Index improved to a level of 27.5 in June from -43 in May, beating expectations of a -23 reading.
Longer-term, the USD remains heavy
On a longer-term perspective, the dollar remains trading below the downtrend resistance line from May 18 highs, which is under attack right now at 1.3625. A confident move above here might increase the bullish pressure on the greenback, pushing the pair towards 1.3675 (June 15 high) before testing the 100-day SMA at 1.3765 area. On the downside, below 1.3600, the pair might seek support at 1.3500 area (June 16 low) before heading towards the 200-day SMA, now at 1.3470.
USD/CAD key levels to watch