USD/CAD: Loonie gains on higher oil, flirts with 1.3900

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 5, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The Canadian dollar regains lost ground versus its American rival in the mid-Asian trades, with USD/CAD now testing 1.39 handle to the downside.

    Loonie edges higher after a volatile session

    Currently, the USD/CAD pair trades -0.34% lower at 1.3903, hovering close to fresh session lows struck at 1.3898 last minutes. USD/CAD peaked just shy of 1.40 barrier on Monday and turned lower thereon, now extending the drop near 1.39 handle on the back of rebounding oil prices after the black gold finished yesterday’s volatile session on a weaker note. At the moment, the US oil (WTI) rises 0.86% and jumps above 37 barrier while the Brent oil also gains 0.52%, climbing further beyond 37.50 levels.

    However, the downside in the USD/CAD pair remains cushioned on the back of rising demand for the greenback as appetite for risk currencies such as the USD re-emerged after China stocks rallied today following the previous rout. The US dollar index edges 0.10% higher and regain 99 barrier so far in Asia.

    Meanwhile, the CAD pair will continue to track the developments around the oil markets and also eye a set of Canadian macro updates for fresh cues in the NA session ahead.

    USD/CAD Technical Levels

    To the upside, the next resistance is located 1.3936 (Dec 23 High) levels and above which it could extend gains to 1.3985 (Jan 4 High). To the downside, immediate support might be located at 1.3883/80 (1h 50-SMA/ 5-DMA) and below that 1.3813/12 (Dec 28 & Jan 4 Low).
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