USD/CAD drops to 6-week lows amid rallying oil prices
• A strong rally in Oil prices underpin Loonie and exert some pressure.
• The USD selling seems to have abated but did little to impress bulls.
• The focus now shifts to the release of the Canadian/US jobs report.
The USD/CAD pair remained under some selling pressure through the early European session on Friday and dropped to six-week lows, around mid-1.3300s in the last hour.
Despite the fact that the recent US Dollar bearish pressure now seems to have abated, at least for the time being, the pair extended its recent pullback from multi-month tops and traded with a negative bias for the fourth session in the previous five.
A strong rally in Crude Oil prices, now up around 2.0% for the day, turned out to be one of the key factors that underpinned demand for the commodity-linked currency - Loonie and kept exerting some downward pressure on the major.
Oil rose for the second straight session on Friday and recovered farther from five-month lows hit earlier this week in the wake of reports that the US may delay tariffs on goods from Mexico and indications that OPEC+ may extend their supply cuts.
It, however, remains to be seen if bearish traders are able to maintain their dominant position or opt to cover their positions ahead of Friday's important release of monthly jobs report from the US and Canada, due later during the early North-American session.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
