The USD/CAD pair is looking tired as it trades just a few pips short of 1.3209, which is 38.2% Fibonacci retracement of the Trump rally.
A look at the daily chart tells us that the spot has failed twice – Feb 7 & Feb 22 – this month at 1.309 levels. What’s worth noting is that even the 50-DMA is now positioned at 1.3209 levels.
CAD under pressure despite range bound oil prices
Monday’s rally in the USD/CAD pair from 1.3083 to 1.3181 contradicts the range bound action in the oil prices. Moreover, oil benchmarks have been restricted to a narrow range amid the tug of war between OPEC and US Shale.
The focus today is on the Trump speech to congress. Trump trade is at a risk of fizzling out if POTUS keeps mum on the details of the fiscal policy. However, CAD may under perform as unwinding of the Trump trade could also weigh over oil and other commodity prices.
USD/CAD Technical Levels
The spot was last seen trading around 1.3185. A break above 1.3209 (38.2% fib + 50-DMA) would expose 1.3236 (Dec 5 low) and 1.3272 (100-DMA). On the other hand, a breakdown of support at 1.3175 (session low) could yield a sell-off to 1.3144 (5-DMA + 200-DMA), under which a major support is seen at 1.3083 (Monday’s low).
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