Back in January, the USD/CAD was traded near the multi-month low of 1.2960, which corresponds to the levels of October 2018. However, already at the end of February, the pair reached 1.3460 (June 2019 levels), gaining 4.3% in two months.
Fears about the coronavirus pandemic caused a severe drop in world stock indices and commodity prices, with which crawled down and commodity currencies quotes.
In its latest report, released on Monday, the Organization for Economic Co-operation and Development (OECD) lowered its forecast for economic growth in 2020, as China's economy was hit hard by the outbreak of coronavirus. Now the OECD expects that global GDP this year will grow by 2.4% compared to 2.9% according to the December forecast.
Investors now hope that global central banks and government departments will help markets stabilize and protect the economy from the effects of coronavirus.
The RB of Australia lowered its interest rate by 0.25% on Tuesday, bringing it to the level of 0.50%, which was the fourth decrease in less than a year. RBA Governor Philip Lowe signaled the likelihood of further policy easing.
On Wednesday, a meeting of the Bank of Canada will take place, and the decision on the rate will be published at 15:00 (GMT).
If the Bank of Canada reduces the rate by 0.25%, then it will drop to 1.50% from the current 1.75%.
Signs of worsening morbidity in Iran, Italy and South Korea are forcing market participants and global central banks and governments to overestimate the severity of impending problems. The decline in world commodity prices, primarily oil, is also putting pressure on the Canadian dollar. Thus, the USD/CAD pair is likely to maintain positive momentum, at least this week.
Above the short-term support level of 1.3330 (ЕМА200 on the 1-hour chart), only long positions should be considered. A signal for sales may be a breakdown of this support level with a target at support levels 1.3253 (ЕМА200 on the 4-hour chart), 1.3215 (ЕМА200 on the daily chart). Above the support level of 1.3215, the bullish trend of USDCAD prevails.
Support Levels: 1.3345, 1.3330, 1.3253, 1.3215
Resistance Levels: 1.3380, 1.3435, 1.3452, 1.3465
Trading Scenarios
Sell Stop 1.3310. Stop-Loss 1.3410. Take-Profit 1.3253, 1.3215
Buy in the market. Stop-Loss 1.3310. Take-Profit 1.3380, 1.3435, 1.3452, 1.3465
