USD/CAD drops below 1.28 as oil recovers losses

Bid tone around CAD strengthened in Asia as oil recovers losses at both the sides of the Atlantic, pushing USD/CAD to a session low of 1.2788 levels.

Trades below hourly 50-MA

The pair is back below hourly 50-MA, now seen at 1.2804 levels. US oil prices fell to a session low of $49.88/barrel; a minor technical correction after three-day winning streak. However, prices have moved off session lows to trade around $50.10/barrel.

Consequently, USD/CAD fell below 1.28 levels. Oil prices and haven demand for treasuries should continue to guide USD/CAD pair ahead of Yellen testimony and US government weekly oil inventory report release.

USD/CAD Technical Levels

The immediate resistance is seen at 1.2804 (hourly 50-MA), above which resistance at 1.2842 (hourly 200-MA) stands exposed. A violation there would open up upside till 1.29 levels. On the other hand, a breakdown of support at 1.2762 (previous day’s low) could see the pair drift lower to 1.27 (zero figure) and 1.2654 (June 8 low).