USD/CAD: Loonie seen extending gains

The USD/CAD has declined sharply after breaking a Fibonacci at C$1.2720 with Canadian Dollar extending gains all the way up to C$1.2605 in line with the oil prices rising.

The USD/CAD is trading down 0.3% at around C$1.2610.
 
The US crude oil benchmark WTI rose as high as $59.98 a barrel reaching the highest level in a two-and-half year and it is s consolidating around that level.
 
Technical outlook
The sideways trend on USD/CAD has been invalidated by the exchange rate breaking on the downside. Strong technical support of  C$1.2720 represented by 38.2% Fibonacci retracement of long-term appreciation of Loonie towards C$1.2097 cyclical low and peaking at C$1.2920 opened the way lower.
 
The daily chart indicates that the USD/CAD is moving lower for the seventh day in a row, bringing the Slow Stochastics indicator to the Oversold territory with USD/CAD facing 100-day moving average support at around C$1.2600 first before targeting lower levels at C$1.2470 represented by 28.2% Fibonacci retracement. Technical oscillators like Momentum and MACD all pointing downwards indicating further potential in a current move lower.


USD/CAD daily chart

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