USD/CAD falls below the 30 July low of 1.2422, last seen at 1.2409
Sellers will be looking to breach 1.2400 next and there isn’t much support beyond that as the downside momentum could extend back towards the region of 1.2200 to 1.2300.
The 61.8 retracement level of the swing move higher from May to August is seen at 1.2367 so one can perhaps point to that for some minor support in the meantime.
There are a lot of good things working in favour of the loonie lately but surging oil prices continue to be the most obvious catalyst. WTI is trading back up above $81 today, 0.8% higher, and that continues to keep the currency underpinned.
Meanwhile, the dollar is not looking too hot despite rising wage pressures from yesterday’s US CPI report so there’s that to consider when weighing sentiment this week.
I’d still argue that the loonie is still favoured for further gains at this stage and CAD/JPY is also another key pair to watch as it climbs to its highest since January 2018 and closes in on key resistance around 91.58-64 at the moment.