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I will start this review with the Bank of Canada's position on the recovery of the Maple Leaf country's economy from the effects of COVID-19. Quite a lot has already been written about the position of the Federal Reserve System (FRS) on this issue. But now it is interesting to know the opinion of the Bank of Canada regarding the further impact of COVID-19 on the economy of the Maple Leaf country.
According to the Canadian regulator, to maintain the country's economy, it is necessary to double the costs that will be used to counter COVID-19 in this country. Canadian Prime Minister Trudeau believes that his country is facing the second wave of the coronavirus pandemic. I believe that this is his trump card since everything can be attributed to the coronavirus pandemic with adverse economic consequences. In truth, Canada is not so bad when compared to the situation in the United States of America. Nevertheless, the Canadian authorities are reinsured, and they can be understood because it is not known what will happen in the future.
Since this currency pair is not often analyzed, let's start with the weekly timeframe.
Weekly
After a fairly long decline, the USD/CAD pair is strengthening for the third week in a row. At the time of writing, the pair is trading near 1.3358. In this regard, let me remind you that the level of 1.3360 is a very significant historical and technical mark. It is not for nothing that the pair stopped near these prices and now must decide on its next direction. At this stage of time, the black 89 exponential moving average is tested for a breakdown, which tries to provide decent resistance to the price and not let the quote go up. So far, it is possible to do this, however, let's not forget that at 1.3455, the pair is waiting for a 50 simple moving average, which will not be weaker than its predecessor.
In my subjective opinion, the closing of weekly trading above 50 MA and the broken support of 1.3485 will indicate a bullish scenario for this currency pair. If trading ends below the level of 1.3300, I do not rule out strengthening bearish sentiment, which will result in repeated testing of the key psychological and technical level of 1.3000.
Daily
On the daily chart, the current situation is very uncertain. The pair is trading around the middle of the Ichimoku indicator cloud. Moreover, it is still not possible to overcome the daily 89 EMA, which passes at 1.3376. But even in the case of a true breakdown of the 89 exponential and a continued rise to 1.3440, there are still big questions about the pair's further growth. At the moment, yesterday's candle looks like a reversal, so aggressive and risky sales can be tried from current prices. However, I prefer the idea of opening short positions after the rise to 1.3440/45. Therefore, I suggest that you observe the price behavior near the indicated levels and after the appearance of reversal candle signals on the daily or lower timeframes, sell USD/CAD. In my subjective opinion, this is the main trading idea for this currency pair.
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