by FXOpen on November 28th, 2018

USD/CAD on Upward Move Supported by Demand for USD and Renewed Weakness in Oil Prices

Yesterday the USD/CAD pair quickly reversed an early European session dip to the 1.3240 region and spiked to 4-day tops. The pair’s sudden drop was a reaction to some optimistic comments by China’s Foreign Ministry representative, saying that Trump and Xi have agreed to reach mutually beneficial agreements. However, the price was quickly bought into as the spokesman explained that the agreement refers to Nov. 1st Trump-Xi phone call. The pair was further supported by revived US Dollar demand.

Moreover, some renewed weakness in oil markets, with WTI crude oil losing over 1% for the day, put some additional heat on the commodity-linked currency Loonie and remained supportive of the ongoing positive momentum.

The US Dollar remained in a decent uptrend and traded above the 1.3275 resistance against the Canadian Dollar. The USD/CAD pair even broke the 1.3300 resistance traded as high as 1.3327.

The pair even settled above the 1.3280 level and the 50 hourly simple moving average. Recently, the pair corrected lower and traded below the 1.3300 level.

However, there are many supports on the downside, starting with 1.3290. There are also two bullish trend lines in place with support at 1.3300 and 1.3280 on the hourly chart. The second trend line also coincides with the 50% Fib retracement level of the wave from the 1.3240 low to 1.3327 high.

In the short term, there could be a downside reaction towards the 1.3280 support before the pair resumes its upward move towards 1.3320 and 1.3350.

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