USD/CAD falls to session lows amid surging oil prices, Canadian CPI in focus
Our preference: short positions below 1.3175 with targets at 1.3135 & 1.3110 in extension.Alternative scenario: above 1.3175 look for further upside with 1.3195 & 1.3215 as targets.
• The USD fails to capitalize on the attempted intraday bounce.
• Surging oil prices underpin Loonie and add to the selling pressure.
• Focus remains on today’s release of the latest Canadian CPI figures.
The USD/CAD pair finally broke down of its Asian/early European session consolidative phase and refreshed session lows,
below mid-1.31000s in the last hour.
The pair extended previous session’s sharp retracement slide from the vicinity of 100-day SMA barrier and traded with a
negative bias for the second consecutive session, albeit has managed to hold its neck above three-week lows set at the
beginning of this week.
The Fed Chair Jerome Powell’s overnight comments, reiterating that the central bank would stay patient on monetary policy,
kept a lid on the US Dollar’s attempted intraday bounce from multi-week lows and kept exerting some downward pressure.
Adding to this, a strong follow-through surge in crude oil prices provided an additional boost to the
commodity-linked currency – Loonie and was seen as one of the key factors behind the pair’s
latest leg of a sudden drop of around 25-pips in the last hour or so.
The pair has now weakened back to the very important 200-day SMA support,
which if broken should pave the way for a further downside,
albeit investors’ reluctant to place any aggressive bets ahead of today’s release of Canadian
CPI figures might help limit deeper losses.