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USD/CAD: Loonie scores fresh 2-month highs on Oil rally

FXStreet (Mumbai) - The Canadian dollar remains strongly bid against its US counterpart in the early European trades, knocking-off USD/CAD to fresh two-month lows, as oil extends its overnight rally.

USD/CAD faces stiff hurdle near hourly 20-SMA

Currently, the USD/CAD pair trades -0.39% lower at 1.2965, hovering close to fresh two-month lows of 1.2959. The USD/CAD pair extends its bearish momentum from the past one week, barring a minor correction on Tuesday, as the strong pull back in oil prices is boosting the bids for the resource-linked loonie.

The US oil, WTI, rallies nearly 2% to fresh three-month highs above $ 50 while its European counterpart, Brent trades 1% higher at $ 53.84. Oil prices received fresh impetus from the OPEC head’s comments on Thursday.

Moreover, the US dollar remains broadly undermined
after the US Fed minutes released yesterday offered no clarity on the timing of the Fed rate hike while the persisting risk-on sentiment also fails to lift the greenback. The USD index now trades -0.09% higher at 95.31.

Looking ahead, the pair is likely to get influenced by the Canadian jobs data and the BOC Business Outlook Survey amid a data-dry US macro-calendar.

USD/CAD Technical Levels

To the upside, the next resistance is located at 1.3001/08 (Today’s High & hourly 20-SMA) levels and above which it could extend gains to 1.3075 (Oct 7 & 8 High). To the downside, immediate support might be located at 1.2907 (July 28 Low) levels and below that at 1.2859 (July 29 Low).

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