USD/CAD spikes to 1.34 mark on weak oil prices

Haresh Menghani FXStreet

Having posted a session low near 1.3320 region, the USD/CAD pair regained traction and spiked to the 1.3400 handle amid weaker oil prices.

A weaker trading sentiment around oil prices, with WTI crude oil dropping nearly 1.5% and inching back closer to last week's multi-month lows, has been weighing on the commodity-linked currency - Loonie, collaborated to the pair's recovery from session low.

However, a broad based greenback sell-off, in wake of growing skepticism over the Trump administration's ability to deliver on promised pro-growth economic policies, seems to have capped further up-move, at least for the time being. In fact, the key US Dollar Index tumbled below the 99.00 handle to hit over four month low in reaction to the US president Donald Trump's failure to push through his healthcare reform bill.

• US Dollar rally needs a reboot - SocGen

With an empty US economic docket, market focus would remain on a speech by the Chicago Fed President Charles Evans for some immediate respite for the US Dollar bulls.

Technical levels to watch

A follow through buying interest above the 1.3400 handle might trigger a short-covering rally towards mid-1.3400s, above which the pair seems all set to surpass 1.3475-80 horizontal resistance and head towards testing the 1.35 psychological mark.

On the downside, retracement back below 1.3355-50 immediate support now seems to drag the pair below 1.3320 area towards testing 100-day SMA support near 1.3300-1.3295 region.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.3373

34% Bullish
33% Bearish
33% Sideways

Bias Bullish

1 Month

Avg Forecast 1.3407

53% Bullish
40% Bearish
7% Sideways

Bias Bullish

1 Quarter

Avg Forecast 1.3532

60% Bullish
20% Bearish
20% Sideways

Bias Bullish

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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