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  • WTI surges after the US President Donald Trump warns Iran over nuclear threats.
  • The overall weakness of the US Dollar (USD) also pleased USD/CAD bears to flash 8-month low.
  • Politics/trade may gain higher attention amid no major data on the economic calendar.

With the renewed tension between the US and Iran fuelling oil prices, Canada’s key export-item, USD/CAD traders near the lowest levels last seen since November 2018 as it seesaws near 1.3070 during the early Asian session on Thursday.

The Loonie pair previously capitalized the USD weakness on the back of weak data and expectations of future monetary easing from the Federal Reserve together with major global central banks.

Upbeat outcomes of Canada’s trade balance could also be cited as a reason for the pair’s latest declines.

Crude, on the other hand, gave less importance to the weekly Energy Information Administration (EIA) Crude Oil Stocks Change and Baker Hughes Oil Rig Counts for the US. The reason being the US President Trumps warning to Iran that threats over increasing rich Uranium stocks “can come back to bite.

While the US holiday is likely to weigh on the market momentum today, lack of data from Canada could also restrict the Loonie moves, shifting attention to the trade/political headlines. In doing so, the recent doubts over the global trade mechanism connecting the US might portray the risk-off sentiment.

Technical Analysis

Unless declining below November 2018 low of 1.3048, sellers are less likely to aim for 1.3000 and 1.2969 rest-points, which in turn highlights the importance of late-February low around 1.3113 and latest tops surrounding 1.3150.