USD/CAD tumbles below 1.2700 as oil soars

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 19, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    USD/CAD was trading at the lowest since July and dropped further breaking below 1.2700. The pair accelerated the decline and printed a fresh 9-month low at 1.2630. Price continues near the lows, currently at 1.2645/50, down 150 pips from yesterday’s closing price.

    The loonie is among the top performs in the currency market boosted by a rally in crude oil prices. The WTI barrel is up by more than 3.50%, above $41.00. Also, a weak US dollar across the board is boosting USD/CAD to the downside.

    USD/CAD downtrend intensifies

    Last week the pair lost the 1.2960 support area and accelerated the decline. Initially bottomed at 1.2740. Then rebounded and approached yesterday to the 20-day moving average, before turning again to the downside.

    The recovery of the US dollar was short-lived. From yesterday’s highs, the pair has fallen more than 300 pips and is headed to post the sixth daily loss out of the last eight trading days.

    USD/CAD technical levels

    In the case of a recovery, potential resistance levels might lie at 1.2700/05 (psychological / European session low), 1.2740 (20-hour moving average) and 1.2800 (daily high). On the opposite direction, support now could be seen at 1.2630 (daily low), 1.2600 (psychological) and 1.2560/65 (June 2015 high).
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