- USD/CAD hits 6-day lows but Loonie retreats against other commodity currencies amid risk appetite and crude oil slide.
- Key data ahead: US and Canadian employment report.
The USD/CAD pair continued to slide after the beginning of the US session and bottomed at 1.3067, the lowest level since last Friday. From the lows rebounded to 1.3113 but dropped back under 1.3100. Near the end of the session was hovering around 1.3090, consolidating daily losses.
The move to the downside was triggered by a sharp decline of the US dollar across the board. The greenback was about to have the worst day in months. An improvement in risk sentiment weakened the US dollar and also some profit taking, accelerated the reversal.
The decline in USD/CAD was limited by the decline in crude oil prices. The Lonnie rose against the US dollar but lagged behind other commodity currencies. The WTI was losing 2.50% at $63.65 a barrel. Supply gains offset worries about Iran sanctions. Also, demand concerns contributed to the bearish trend seen during October and also at the beginning of November in crude oil.
On Friday, at 12:30 GMT the official October jobs report will be released in the US and also in Canada.
USD/CAD Technical outlook
The bullish tone of USD/CAD eased significantly with today’s slide and also after finding again resistance around 1.3150/60. The decline found support at the 100-day moving average at 1.3075. A daily close below the mentioned level would weaken the outlook for the greenback, suggesting a test of 1.3045/50 (20-day SMA) and 1.3015 (uptrend line).
To the upside, a recovery above 1.3115/20 could reinforce US dollar strength but a solid breakout above 1.3150/60 is needed in order to open the doors to further gains for the greenback.
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