USD/CAD Price Analysis: Oil strength helps USD/CAD reject 1.34 at the beginning of the week

• USD/CAD trades 0.21% lower despite some USD strength elsewhere.
• The pair has rejected the 1.34 resistance to settle near 1.3350.

USD/CAD 4-hour chart

For once the whole of the FX market sentiment is not being driven by the US dollar. EUR/USD is trading 0.40% lower and USD/CAD is also lower on the day, this has sent EUR/CAD 0.55% in the red. The Canadian dollar is the best performing currency in the G6 and this could have something to do with the firmer oil price. WTI is testing USD 42 per barrel once again and there was some news earlier in the session of major oil companies reducing their CAPEX for next year. 

Looking closer at the chart, the price did not get the chance to test the red downward sloping trendline. The price is now heading below the green horizontal support area at 1.3360. The major low on the chart is the area near the purple line at 1.3235 and this low was formed at the height of the recent USD weakness.

As the dollar starts to recover there could be some resistance levels tested again. If the price does break the red trendline then the orange resistance at 1.3503 could be next. It was a formidable support level in the past and this means it could be a good resistance in the future.

Lastly, the indicators are painting a very mixed picture. The Relative Strength Index is back below the 50 mark and the MACD histogram is green, while the signal lines are above the mid-level. 

Overall, the pair is still making lower highs and lower lows. Much of the future price action in USD/CAD will depend on USD strength leading into this week. For now, the bears are certainly in charge but for how long?. 

Additional levels