USD/CAD consolidating around 1.3000 with bulls capped at 1

USD/CAD consolidating around 1.3000 with bulls capped at 1.3030

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  • USD/CAD consolidates losses at 1.3000 area.
  • The Canadian dollar edges down with oil prices pulling back from eight-month highs.
  • The pair remains at a short distance of two-year lows at 1.2930.

The US dollar has edged up for the second consecutive day on Thursday although the pair remains unable to surpass the 1.3025/30 resistance area. The pair is trading practically flat around 1.3000 in a thin market session amid the US Thanksgiving holiday.

CAD loses steam as oil prices retreat

The mild USD recovery has been supported by the bearish correction on oil prices. The price of the WTI barrel has retreated from eight-month highs above $46 to the vicinity of $45 after having appreciated nearly 12% in a six-day rally.

The Canadian dollar, however, is fairly steady near two-year highs against its North American counterpart. Oil prices remain trading at their highest levels since the first COVID-19 outbreak after surging nearly 30% in November, boosted by hopes that= the coronavirus vaccines, will help to mitigate the slump on demand caused by the lockdowns.

USD/CAD: near key support at 1.2930

From a technical point of view, the dollar is trading above 1.2995 (November 25 low) which guards the path towards 1.2830 (November 9 low). Below here, the pair would be at its lowest prices in two years, with the next area of interest probably at 1.2790 (October 2018 low).

On the upside, the US dollar should first break above 1.3030 (November 25 high, intraday high) to extend towards 1.3120 (November 19 high) and then 1.3170 (November 13 high and 50-day SMA).

Credit: FX Street

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