USD/CAD looks to continue march higher on weaker oil and risk aversion in markets

Technical Analysis

The Canadian dollar is suffering from a double whammy


The pair remains underpinned ahead of European trading as oil is trading lower by 0.9% at $52.19 currently. Adding to woes for the loonie, US-China trade talks look set to be thrown into further limbo as Trump said he is likely not to meet Xi before the March deadline. That has seen markets grow a bit worried alongside fresh concerns on the global growth slowdown.

Both factors are weighing on the Canadian dollar and that is helping to give rise to USD/CAD as seen in overnight trading. Price now runs into highs seen around late November to early December around 1.3320-35. If risk sentiment continues to deteriorate in the session to come, expect price to extend higher towards resistance around 1.3360 before the 76.4 retracement level comes into play @ 1.3384.

In terms of an upside extension, those will be key levels to watch out for today.

However, the key risk event on the day for the loonie will be the Canadian jobs report that is to come later in North American trading. That will be released at 1330 GMT.

Poor figures there will compound woes for the loonie and will likely see more money taken off after a good run to the downside in USD/CAD seen at the start of the year. Even in the case of a strong report, I’d be inclined to buy dips in the pair as long as risk sentiment continues to languish in uncertain/nervous territory as it is now.

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