USD/CAD buyers still poised as oil remains frail to start the new week

Technical Analysis

Author: Justin Low | usdcad

USD/CAD knocks on the door of the 1.3300 handle

USD/CAD D1 11-02
ForexLive
Oil is down by 1.2% on the day as price falls to the $52 handle again and that is helping to keep USD/CAD elevated despite another solid Canadian jobs report on Friday. Buyers remain in near-term control and continue to look poised as they knock on the door of the 1.3300 handle ahead of European trading. The high today touches 1.3297.

Looking ahead, the pair will rely quite a bit on risk sentiment this week with US-China trade talks set to be the main focus once again. That will impact the pair on two fronts i.e. oil price movement and risk sentiment.

The decline on Friday following the jobs report saw the pair supported by the 100-day MA (red line) in what can be seen as a good area for buyers to continue defending the bullish bias. As long as price holds above that, the upside momentum should remain intact.

Key resistance now lies around 1.3320-30 from the late November to early December highs, with further resistance then seen at 1.3360 before the 76.4 retracement level @ 1.3384 comes into play.

I'd be poised to buy into another retracement to the downside towards the 100-day MA (100-hour MA also sits nearby @ 1.3231), but the trade would have to be reliant on optimistic tones from trade talks. If the dip arises as a breakdown in trade talks, the bias would then turn towards shorting the pair on a break of those two levels mentioned.

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