The Loonie continues the downward move following declining oil markets. This week traders await action from the Bank of Canada as well as the US Fed’s long-expected rate hike.
Investor confidence in risk assets is showing a steep downfall as traders fear a growing global economic slowdown and fragile oil prices sees the Canadian dollar stuck at a low level against the greenback.
As the Canadian dollar follows oil prices, shell-shocked energies markets are weakening the CAD as oil prices remain constrained at recent lows.
The US Dollar started a decent upward move after trading as low as 1.3325 against the Canadian Dollar. The USD/CAD pair traded higher and broke the 1.3350 and 1.3380 resistance levels.
The pair even settled above the 1.3370 level and the 50 hourly simple moving average. A high was formed at 1.3400 and later the price corrected lower towards the 50% Fib retracement level of the last wave from the 1.3337 low to 1.3400 high.
More importantly, there is a solid ascending channel in place with support at 1.3365 on the hourly chart. Therefore, if the pair dips from the current levels, it could find support near the 1.3370 and 1.3365 levels.
On the upside, there is a solid resistance near the 1.3400 level, above which the pair could test the 1.3450 level in the near term.