FX.co ★ USD/CAD
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USD/CAD
The price has extended its bullish momentum for a second consecutive day, reaching its highest point of the day at 1.4065 during the early session on Tuesday. This upward move is largely fueled by a strengthening US Dollar (USD) and falling Oil prices, which have pressured the Canadian Dollar (CAD), traditionally linked to oil prices. As global economic factors continue to evolve, USD/CAD traders are closely monitoring key levels for potential resistance and further price action. Impact of Falling Oil Prices on the Canadian Dollar: A significant contributor to the pair's bullish movement is the bearish trend in Crude Oil prices. The oil market opened the week with a gap lower following weaker-than-expected Chinese inflation data. The data pointed to an ongoing deflationary trend, which dampened expectations for strong fuel demand. Additionally, disappointment over China’s fiscal stimulus plans has overshadowed the positive Canadian jobs data, further weighing on the CAD. This combination of factors has led to reduced expectations for aggressive rate cuts by the Bank of Canada (BoC), giving the USD/CAD pair additional support. Technical Analysis of the USD/CAD: The immediate focus is on the 1.3800 level, which is not only a psychologically significant barrier but also a technical level that has proven to be a point of resistance in previous price action. A breakout above this level could open the door for further gains, with the next target likely being the 1.4179 resistance. However, if the pair faces resistance at 1.3800, it may consolidate in the short term before attempting another move higher.
