USD/CAD tumbles toward 1.3100, Loonie outperforms

The USD/CAD is falling for the third consecutive trading day, accelerating the decline. It is trading at 1.3115/20, approaching to October lows. The l  |  20/10/2020 16:55
  • Loonie rises across the board on Tuesday as US dollar retreats.
  • USD/CAD heads to test October lows at 1.3098 as bearish pressure intensifies.

The USD/CAD is falling for the third consecutive trading day, accelerating the decline. It is trading at 1.3115/20, approaching to October lows. The loonie is among the top performers on Tuesday.

The pair moves sideways during most of the day between 1.3170 and 1.3200 until it broke to the downside during the American session. It tumbled to 1.3115, hitting a six-day low.

The decline took place amid a decline of the US dollar across the board during the American session. The greenback lost strength and trimmed gains versus AUD, NZD and JPY and dropped further against EUR. The euro and the loonie are among the top performer on Tuesday.

The DXY dropped to 93.02, the lowest since October 9 and is under pressure. A decline under 93.00 would suggest more weakness ahead for the greenback.

Attention now is set on the negotiations in the US for a new round of fiscal stimulus. Speaker of the House Nancy Pelosi will speak in a few hours with Treasury Secretary Steven Mnuchin. According to Pelosi, today is the last day to reach an agreement that could be voted before the November 3 election.

From a technical perspective, USD/CAD remains bearish about to test the October low located at the 1.3100 zone. A break lower would likely lead to more losses. The next strong support is seen at 1.3035. On the upside, the dollar needs to rise above 1.3250/60 to remove to negate the downside bias.

Technical levels

 

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