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USD/CAD retraces half of 2016 rally

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Córdoba) - USD/CAD has fallen sharply on Thursday as the loonie strengthened on the back of oil’s comeback and as investors continue to digest not-so-dovish BoC stance.

    USD/CAD has lost nearly 300 pips throughout the day, hitting its lowest level in eight days at 1.4229, breaking below the 50% Fibo retracement of its 2016 rally between 1.3811-1.4689 that stands at 1.4250.

    Oil prices staged an impressive comeback, with WTI futures rising more than 5% to near $30.00 a barrel, which gave the loonie additional tailwinds.

    At time of writing, USD/CAD is trading at 1.4235, down 1.85% on the day. The pair has dropped more than 400 pips from yesterday’s 13-year peak of 1.4689.

    USD/CAD levels to watch

    On the downside, next supports are seen at 1.4200 (psychological level) and 1.4150 (61.8% Fibo of 2016 rally). On the upside, next resistances could be found at 1.4540 (Jan 21 high), 1.4689 (Jan 20 high) and then 1.4951 (monthly high March 2003) ahead of 1.5000 (psychological level).
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