USD/CAD rises toward 1.35 as escalating geopolitical tension weighs on oil

Escalating geopolitical tensions weigh on commodities on Monday.
US Dollar Index clings to small gains above 97.50.
Coming up: Speeches by FOMC members and BoC Governor Poloz.

Eren Sengezer FXStreet

The USD/CAD pair rose sharply in the early Asian session on Monday as markets reacted to President Trump's remarks over the weekend on the trade conflict with China. After advancing to a fresh 10-day high of 1.3494, the pair has gone into a consolidation phase and was last seen trading at 1.3477, 0.41% above last week's closing level.

Touching on the trade talks with China in a Twitter thread, Trump said that tariffs on Chinese goods were set to increase to 25% from 10% on Friday and added that he wouldn't let China renegotiate the deal. Commenting on Trump's comments, "We think Trump may be emboldened by the strength of the US economy and firm US equities. As such the threats could amount to a negotiating ploy,” TD Securities said. “The immediate reaction has been for China's delegation to reportedly delay or cancel its trip to Washington.”

Resurfacing concerns over a long-lasting trade war reminded investors of its potential impact on the crude oil demand outlook and weighed on the commodity. Following Friday's modest recovery, the barrel of West Texas Intermediate turned south and dropped to its lowest level since early April at $60.02, hurting the demand for the commodity-sensitive loonie.

On the other hand, the greenback seems to be taking advantage of the risk-averse atmosphere on Monday with the US Dollar Index posting small gains near 97.60.

Later in the day, FOMC members Harker and Williams as well as Bank of Canada Governor will be delivering speeches. There won't be any macroeconomic data releases neither from the U.S. nor Canada.

Technical levels to consider

USD/CAD

Overview
Today last price	1.3477
Today Daily Change	0.0055
Today Daily Change %	0.41
Today daily open	1.3422

Trends
Daily SMA20	1.3394
Daily SMA50	1.336
Daily SMA100	1.3352
Daily SMA200	1.3225

Levels
Previous Daily High	1.3491
Previous Daily Low	1.3406
Previous Weekly High	1.3491
Previous Weekly Low	1.3376
Previous Monthly High	1.3522
Previous Monthly Low	1.3274
Daily Fibonacci 38.2%	1.3439
Daily Fibonacci 61.8%	1.3459
Daily Pivot Point S1	1.3388
Daily Pivot Point S2	1.3354
Daily Pivot Point S3	1.3302
Daily Pivot Point R1	1.3473
Daily Pivot Point R2	1.3525
Daily Pivot Point R3	1.3559

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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