USD/CAD keeps heading south and approaches important support at 1.3520

USD/CAD keeps heading south and approaches important support at 1.3520

  • The USD dives for the third consecutive day.
  • Hopes of Fed easing are weighing on the Greenback.
  • The Lonie appreciates with oil prices rising steadily.

The US Dollar has extended losses against its Canadian counterpart on Tuesday reaching to hit session lows at 1.3526, only a few pips above three-week lows at 1.3520.

Hopes of Fed easing are weighing on the US Dollar

The greenback has remained on the back foot on the back of the release of Friday’s macroeconomic figures. The PCE core prices Index showed cooling inflation for the third consecutive month, while US consumer spending remained practically unchanged in November.

These figures add reasons to anticipate a slowdown in Federal Reserve’s rate hikes, which is acting as a headwind for the US dollar.

Furthermore, oil prices have continued crawling higher, with the US benchmark WTI reaching levels past $80, which has appreciated nearly 15% from early December lows. The rising crude prices offer additional support to the commodity-linked CAD, which has gained about 1.25% over the last seven days.

USD/CAD about to test 1.3520 support

From a technical point of view, the breach of trendline support in the vicinity of 1.3600 has negated the USD/CAD’s upside trend from Mid-November lows at 1.3230, and the pair seems set to test 1.3520 support area, which could trigger further selling pressure.

A confirmation below the mentioned 1.3520 might boost confidence for bears to push the pair towards the 100-day SMA, now at 1.3410 on its way to December 5 low at 1.3385.

On the upside, the pair should return above the 50’day SMA, at 1.3540 to ease negative pressure and attempt to regain the previous trendline support at 1.3630 before aiming for December’s peak, at 1.3700.

USD/CAD Daily Chart

Technical levels to watch

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Read More

Total
0
Shares