USD/CAD Keeps the Red as Oil Turns Positive

USD/CAD Keeps the Red as Oil Turns Positive

21 April 2016, 07:28
Roberto Jacobs

USD/CAD Keeps the Red as Oil Turns Positive

The USD/CAD pair moves-off multi-year troughs and steadies around the mid-point of 1.26 handle amid improved risk sentiment.

USD/CAD rejected near 1.2660

Currently, the USD/CAD pair drops -0.12% to 1.2642, heading for a retest of daily lows struck at 1.2632 in the last hour. The bulls are seen tightening their grip on the Canadian dollar as the oil prices halt the corrective slide and revert to the green zone. Both crude benchmarks now trade +0.20% higher, hovering near fresh five-month peaks reached yesterday after the EIA inventory report showed smaller than expected rise in the US crude supplies.

Moreover, the recent optimistic remarks from BOC Governor Poloz also keep the sentiment around the loonie underpinned. BOC Chief noted that the economic data have been encouraging and it would require three-year adjustment to oil price drop.

Meanwhile, the oil markets will continue to dominate the moves in the USD/CAD pair. Besides, the US economic releases will be also closely watched for further momentum on the major.

USD/CAD Technical Levels

To the upside, the next resistances are seen near 1.2657/62 (daily pivot & high) and 1.2720/43 (daily R1/ 5-DMA). To the downside, immediate support might be located at 1.2594 (Apr 20 Low) and below that 1.2550 (July 2015 levels).


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