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USD/CAD hits new 12-yr highs as Oil rout extends

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - USD/CAD prolongs its upwards trajectory for the fifth consecutive session on Thursday, as the oil prices continue to tumble amid heightening risk-aversion on global stocks slump.

    USD/CAD holds above 1.41 handle

    Currently, the USD/CAD pair rises 0.21% to 1.4107, receding from fresh twelve-year peaks scored at 1.4118 in the recent dealings. The Canadian dollar remains relentlessly offered against its American neighbour in the mid-Asian trades, as the oil prices continue to suffer from the omnipresent oversupply concerns and bleak global economic outlook, particularly China’s, the world’s second largest consumer of oil.

    At the moment, the US oil (WTI) drops -2.34% to fresh seven-year lows near $ 33 while the Brent oil sinks to fresh 12-year lows ahead of 33 handle, down -2.74% on the day.

    However, the losses in the Loonie appear capped on the back of a weaker US dollar across the board, following less hawkish FOMC minutes and diminishing risk-appetite.

    Looking ahead, oil-price movement will play a crucial role while markets remain focused on Bank of Canada (BOC) Governor Poloz speech due later in the NA session.

    USD/CAD Technical Levels

    To the upside, the next resistance is located 1.4165 (Aug 2003 High) levels and above which it could extend gains to 1.4189/90 (daily R2/ Jul 2003 High). To the downside, immediate support might be located at 1.4087/84 (1h 10 & 20-SMA) and below that 1.4017 (1h 50-SMA).
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