USD/CAD: Will it break below 1.34?

Canadian dollar failed to cheer the oil rally on Wednesday. The USD/CAD pair did print a daily low of 1.3357 before ending marginally higher on the day at 1.3437.

Moreover, the US dollar ruled the roost as the OPEC deal meant oil prices could witness a sustained rally in the days ahead. This raises the prospects of a faster than expected Fed rate hikes in 2017.

Consequently, the Canadian dollar failed to hold on to gains and ended the day higher at 1.3437. However, the USD/CAD pair could break below 1.34 once the oil driven risk-on runs out of steam.

A weak US wage growth and non-farm payrolls data could also trigger a much awaited correction in the US dollar.

USD/CAD Technical Levels

A break below 1.34 (zero figure) would expose 1.3357 (previous day’s low), under which 50-DMA support of 1.3328. On the higher side, breach of 1.3444 (5-DMA) could yield a re-test of resistance at 1.35 (zero figure) and 1.3538 (Nov 28 high).