USD/CAD jumps to 1.3800 neighborhood as oil slump continues

Haresh Menghani FXStreet

The Canadian Dollar continues to lose ground against its US counterpart, with the USD/CAD pair hitting fresh 14-month highs and fast approaching the 1.3800 handle.

Currently trading around 1.3785-90 band, the ongoing slump in oil prices amid renewed fears of global supply glut, with WTI crude oil slammed below the $45.00/barrel mark, has been weighing heavily on the commodity-linked currency - Loonie, over the past three weeks.

• WTI slumps -3% in Asia, breaches $ 44 mark

With the Federal Reserve leaving doors open for two more interest rate-hike in 2017, diverging monetary policy stance between the Federal Reserve and the Bank of Canada further collaborated to the pair's strong up-surge to the highest level since February 2016.

Investors on Friday will remain focused on the key monthly jobs report (NFP) from the US, which if reinforces market expectations for an eventual Fed rate-hike action at its June meeting should pave way for continuation of the pair's strong bullish momentum.

• US: Decent economic releases suggest economy recovering at moderate pace – ANZ

Technical levels to watch

Bulls would be eyeing for a sustained move beyond the 1.3800 handle, above which the pair is likely to accelerate the up-move towards 1.3840-45 horizontal resistance before eventually aiming to reclaim the 1.3900 handle.

On the flip side, any retracement below 1.3755-50 immediate support now seems to find fresh buying interest around the 1.3700 handle, which if broken is likely to trigger a near-term corrective slide towards 1.3630 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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