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USD/CAD breaks below 1.30, WTI near $41.00

The Canadian dollar has now pared part of the initial losses vs. its peer, dragging USD/CAD back to the 1.2980/90 area.

USD/CAD gives away gains on oil recovery

CAD is deriving extra support following a bout of buying interest in crude oil prices, with the barrel of West Texas Intermediate advancing near the $41.00 mark, keeping alive the upbeat sentiment.

In the data space, February’s inflation figures are due later in Canada, followed by US Reuters/Michigan index, speeches by FOMC’s Bullard and Rosengren and the oil rig count by driller Baker Hughes.

USD/CAD significant levels

As of writing the pair is advancing 0.14% at 1.2995 with the next resistance at 1.3334 (200-day sma) ahead of 1.3355 (23.6% Fibo of 1.4692-1.2941) and then 1.3377 (20-day sma). On the other hand, a break below 1.2941 (2016 low Mar.17) would open the door to 1.2827 (monthly low Oct.15 2015) and then 1.2124 (monthly low Jun.16).

Monetary policy divergence is still a valid argument for weaker EUR/USD - Rabobank

Piotr Matys, FX Strategist at Rabobank, suggests that while EUR/USD maintained upside momentum and appreciated beyond the 1.13 level, the potential increased monetary policy divergence between the ECB and the Feb is still a valid argument in favour of a weaker EUR/USD.
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EUR: ECB official comments lead to consolidation - BBH

Research Team at BBH, suggests that the comments by the ECB's Draghi and Praet may have encouraged consolidation in the euro ahead of the weekend.
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