USD/CAD fades the spike to 1.2920, back below 1.2900
- The pair is adding to Friday’s losses, returning to the sub-1.2900 area.
- Decent contention emerged in the low-1.2800s in the near term.
- Fedspeak, risk trends, oil expected to dictate the pair’s price action.
The Canadian Dollar has recovered the smile vs. its American neighbour at the beginning of the week, now dragging USD/CAD to the sub-1.2900 area after a failed attempt to extend the recovery beyond 1.2920.
USD/CAD finds support near 1.2800 near term
The pair is reverting Friday’s retracement to the 1.2800 neighbourhood, where some decent support seems to have emerged. Today’s down move follows the better tone around the riskier assets, which is lending extra support to the Canadian Dollar.
CAD is advancing despite the softer tone in crude oil prices, with the West Texas Intermediate retreating from earlier 2-month tops beyond the $66.00 mark per barrel, turning negative for the day.
The pair, in the meantime, has regained the 1.2900 milestone and above although it appears to have met strong resistance around the 1.2930 area, coincident with the 50% Fibo retracement of the 2017 drop.
Furthermore around CAD notes the speculative community took the net long positions to fresh 5-week tops in the week to March 20, according to the latest CFTC report.
Looking ahead, the US trade policy should remain in centre stage along with risk appetite trends and US-CA yield spreads as the main drivers behind CAD’s price action.
USD/CAD significant levels
As of writing the index is losing 0.02% at 1.2893 and a breach of 1.2803 (low Mar.12) would expose 1.2722 (38.2% Fibo of the 2017 drop) and finally 1.2649 (200-day sma). On the other hand, the next up barrier is located at 1.2951 (high Mar.22) seconded by 1.2984 (10-day sma) and then 1.3126 (2018 high Mar.19).
