Falling oil and poor risk appetite is a double-dose of bad news for the Canadian dollar as it continues to carve out fresh five year lows.

The US dollar is mixed over all but USD/CAD is driving higher with oil down nearly 5%. Aside from the psychological 1.20 barrier, there is very little resistance on the USD/CAD chart as the pair breaks 1.1950. The pair cleared the 61.8% retracement of the 2009-2011 fall early this year and that opens the way to 1.30.

There was some good news in the Bank of Canada Business Outlook survey today with manufacturers stepping up investment intentions, partly due to the weaker loonie. That’s more-than-offset, however, by less investment in commodities.

USDCAD weekly Jan 12 2015

USDCAD weekly – where’s the resistance?

Others note that the CAD-short trade isn’t crowded despite the big move. The CFTC Commitments of Traders numbers only showed a net CAD short of 17K.