- The gains that USD made against CAD since the beginning of the year are slowly eroded.
- The pair has reversed the 2020 bullish trend, confirmed by a pullback of 78.6%.
- CAD short-term bearishness stalled despite negative sentiment surrounding the USD.
The US dollar Canadian dollar (USD/CAD) has a technical advantage to favor more upside movement if the USD bulls emerge in the pair. At the same time, the USD/CAD bearishness can be put to the test if the pair takes a dip in the 1.3319-1.3330 region.
USD/CAD 2020 Analysis: Bad Performance can be followed by Good Performance
The USD/CAD exchange rate went through a turbulent year with ups and downs. At the beginning of the year, the pair set in motion a strong bullish run after initially it challenged the big round number 1.3000 and failed to sustain any pressure below. Loonie profited around 1700 pips in the first quarter of 2020 as more aggressive buyers stepped in.
However, the bullish run topped near the USD/CAD 17-year high which occurred simultaneously with the start of the COVID-19 pandemic lockdowns. Following this development, the pair sentiment has turned to the downside, losing most of its 2020 early gains.
Bearing in mind that the USD/CAD price has reached oversold conditions, the pair may stay enticing for USD-bullish market themes. The USD/CAD long-term bearish trend is still unbroken; however, the short-term price action on other dollar-based crosses can inhibit any attempt for further USD selling pressure.
Sellers in the pair looking for more downside can find an obstacle near the support zone at the 1.3319-1.3330 area. A break and close below this batch of potential support can lead to more selling pressure in the pair all the way down to 1.3250 followed by 1.3200. These were both key support levels established in early February.