USD/CAD looks towards 1.30 as the oil rally pulls back a little

Technical Analysis

Author: Justin Low | usdcad

USD/CAD trades near the highs for the day at 1.2976

The loonie is facing a bit of pressure in trading today as oil prices slip a little as we begin the new week. Friday's release of both the US and Canadian jobs report saw the former win out in the end as buyers defended a move lower by leaning onto the 200-hour MA (blue line) and the 38.2 retracement level near 1.2900.

Price stayed above that and that means near-term bias remains more bullish. With the lack of fresh developments in the USMCA deal, the focus for the loonie to start the week has been that of oil prices.

Brent is down 0.75% on the day to $83.53 while WTI crude is down 0.59% to $73.90 currently. Both are weighed lower as traders scale back on long positions but the major theme at play remains the same and that is Iran's supply disruption ahead of US sanctions to come next month.

The big question will be can Saudi Arabia fill Iran's shoes and that will be something to watch out for in the oil market and also for the Canadian dollar.

For now, USD/CAD looks set to attempt a test of the 1.30 handle in the near-term. But buyers will be eyeing that 100-day MA for a more attractive proposition to the upside for the pair:

That will be a key area for sellers to lean on as well as they have been doing since mid-September.

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose