USD/CAD extends losses below 1.3000 as oil moves higher

Loonie benefits from firmer oil as US sanctions on Iran take effect.
Looks to remain in range ahead of the Canadian Ivey PMI and US JOLTS job openings.

Dhwani Mehta FXStreet

The USD/CAD pair tried several attempts to resist above the 1.30 handle in early Asia, but in vain, as the bears regained control, now dragging the rates to the lowest levels in three trading days ahead of the European open.

USD/CAD: Focus on Oil and Canadian data

The spot extends its consolidative mode near seven-week lows into a sixth day today, although remains poised for further downside, in the wake of the recent bullish momentum seen around oil prices, which will keep the resource-linked Loonie buoyed.

Oil prices caught a fresh bid-wave following reports that the US sanctions on Iran took effect earlier today. This helped the CAD to extend the gains below the 1.30 handle. Meanwhile, a broadly subdued US dollar offers little help to stall the renewed selling in the major.

On Monday, USD/CAD jumped to 1.3040 levels following reports that Saudi Arabia froze new trade and investment and expelled the Canadian ambassador in retaliation for Ottawa’s call to free arrested Saudi civil society activists. However, the spike was reversed after the US dollar corrected sharply from more-than two-week tops versus its main competitors.

USD/CAD Technical Levels

Denis Joeli Fatiaki, Chief Market Analyst at Leo Prime, noted: “The Pair needs to break and stay above 1.30052 to continue to its next target at 1.30148 to 1.30200. The pair also needs to stay in the price channel to continue to the upside. If it fails to hold within the price channel, then it could fall to around 1.29965 to 1.29867 support.

Support - 1.29965, 1.29867, 1.29789

Resistance - 1.30052, 1.30148, 1.30200.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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