Search ForexCrunch

   “¢   Oil adds to the overnight slump, triggered by Trump’s remarks and weigh on Loonie.
   “¢   The positive momentum seemed rather unaffected by a subdued USD price action.
   “¢   All eyes remain glued to the Fed Chair Jerome Powell’s semiannual testimony.

The USD/CAD pair built on the overnight goodish bounce from near three-week lows and is now looking to extend the momentum further beyond the 1.3200 handle.

Crude oil prices added to the overnight slump, triggered by the US President Donald Trump’s comments, was seen as one of the key factors weighing on the commodity-linked currency – Loonie and driving the pair higher for the second consecutive session.

In an early morning tweet on Monday, Trump said that oil prices were too high and the cartel should work on bringing them lower. The comments largely offset fear of short supply from the US sanctions on Iran/production cuts by OPEC and triggered a selloff in oil prices.  

The ongoing positive move seemed rather unaffected by a subdued US Dollar price action amid the latest optimism over US-China trade relations, especially after Trump said that he will extend a deadline to escalate tariffs on Chinese imports.

It, however, remains to be seen if bulls are able to maintain their dominant position or the pair continue with its struggle to make it through 100-day SMA key barrier as the focus now shifts to the Fed Chair Jerome Powell’s semiannual testimony before Congress later today.

Technical levels to watch

Immediate resistance is pegged near the 1.3230 region and is closely followed by mid-1.3200s (100-DMA), above which the pair is likely to accelerate the up-move and aim towards reclaiming the 1.3300 round figure mark. On the flip side, the very important 200-day SMA, currently near the 1.3145-40 region now seems to protect the immediate downside, which if broken might turn the pair vulnerable to slide back towards testing sub-1.3100 level.