It seems the greenback is now taking a breather, with USD/CAD looking to stabilize in the 1.1965/70 area.
USD/CAD down from 1.2020
After reaching multi-year peaks around 1.2020 in early trade, the US dollar lost impetus, helped by the increasing sentiment towards the risk appetite and the subsequent dismal results from US retail sales during December. In the broader picture, however, the USD dynamics continue to underpin the current upside, while oil prices remain the main concern for the Canadian dollar. “CAD’s reaction to falling oil prices has accelerated as oil prices have shifted lower. We expect a similar response to the impact on the economy; as oil falls lower and lower it becomes increasingly likely for investment plans to be cancelled, having a larger and larger impact on the economy”, argued Camilla Sutton, Chief FX Strategist at Scotiabank.
USD/CAD levels to watch
As of writing the pair is advancing 0.16% at 1.1974 and , a break above 1.2017 (2015 high Jan.14) would open the door to 1.2070 (low Apr.24 2009) and finally 1.2100 (psychological level). On the downside, the next support aligns at 1.1843 (10-d MA) ahead of 1.1836 (low Jan.12) and then 1.1805 (low Jan.9).
USD/CAD down from 1.2020
After reaching multi-year peaks around 1.2020 in early trade, the US dollar lost impetus, helped by the increasing sentiment towards the risk appetite and the subsequent dismal results from US retail sales during December. In the broader picture, however, the USD dynamics continue to underpin the current upside, while oil prices remain the main concern for the Canadian dollar. “CAD’s reaction to falling oil prices has accelerated as oil prices have shifted lower. We expect a similar response to the impact on the economy; as oil falls lower and lower it becomes increasingly likely for investment plans to be cancelled, having a larger and larger impact on the economy”, argued Camilla Sutton, Chief FX Strategist at Scotiabank.
USD/CAD levels to watch
As of writing the pair is advancing 0.16% at 1.1974 and , a break above 1.2017 (2015 high Jan.14) would open the door to 1.2070 (low Apr.24 2009) and finally 1.2100 (psychological level). On the downside, the next support aligns at 1.1843 (10-d MA) ahead of 1.1836 (low Jan.12) and then 1.1805 (low Jan.9).
