USD/CAD printed fresh 1-year low despite risk aversion and crude oil price

Matías Salord FXStreet

The Canadian dollar is among the top performers on Friday. The loonie remains strong, unaffected by mixed data from Canada and neither by a decline in crude oil price.

CAD Unstoppable

USD/CAD broke below 1.2539 (Jul 20 low) and fell to 1.2520, hitting a fresh 1-year low. The pair moved closer to the 2016 low (1.2460).

At the moment, it trades at 1.2530/35, with the bearish bias (short and long term) intact. The pair is falling for the fourth day in a row the seventh time out of the last eight trading days. Since the beginning of the month dropped more than 400 pips. USD/CAD is about to post the lowest weekly close since June 2015.

Earlier today, CPI and retail sales data from Canada boosted the pair. The CPI index dropped 0.1% June and the annual rate stood at 1.0%. Retail sales rose 0.6% in May, above the 0.4% expected. The loonie received an impulse from the numbers. According to analysts from ING, the temporary inflation lull is no barrier for more rate hikes from the Bank of Canada.

Canada: Retail sales increased for third consecutive month, rising 0.6% to $48.9 billion in May

Canada: CPI rose 1.0% on a year-over-year basis in June, following a 1.3% gain in May

Canada: ‘Temporary’ inflation lull no barrier for the BoC - ING

The downside in the pair continues despite the fact that crude oil prices are falling on Friday. The WTI barrel is down 0.83%. Also, risk aversion is doing nothing to stop the slide of USD/CAD. The Dow Jones is falling 0.31% and the Nasdaq drops 0.21%.

The bearish momentum continues to be elevated, offsetting oversold conditions of some technical indicators. The pair is about on its way to the fourth weekly decline in a row.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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