USD/CAD jumps to 2-week tops, nearing mid-1.3300s

Haresh Menghani FXStreet

• The global flight to safety lifts the USD to near two-week tops.
• Weaker oil prices undermine Loonie and remained supportive.
• Today’s second-tier economic data might provide some impetus.

The USD/CAD pair built on the overnight positive momentum and climbed further beyond the 1.3300 handle to hit over two-week tops in the last hour.

A slowdown in China economy to 28-year lows, followed by a downward revision to its global growth forecasts by the IMF fanned fresh worries over global growth and boosted the US Dollar's traditional safe-haven appeal.

Meanwhile, weakening global economic data were cited as a headwind for crude oil prices, which further undermined the commodity-linked currency - Loonie and remained supportive of the up-move to the highest level since Jan. 7.

The latest leg of a sudden pick up over the past hour or so could also be attributed to some technical buying on a sustained move beyond the 1.3315-20 region, lifting the pair back towards 50-day SMA support-turned-resistance.

It would now be interesting to see if bulls are able to maintain their dominant position amid relatively thin economic docket, featuring the release of Canadian manufacturing sales and existing home sales data from the US.

Technical levels to watch

On a sustained move beyond the mentioned barrier, around the 1.3345 region, the pair is likely to aim towards reclaiming the 1.3400 round figure mark. On the flip side, any meaningful retracement now seems to find immediate support near the 1.3300-1.3290 region, which is followed by support near the 1.3255-50 horizontal zone.

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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