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USD/CAD fades the spike, challenges 1.3000

FXStreet (Edinburgh) - USD/CAD has quickly faded the spike to session tops in the 1.3080 area on Tuesday, dropping nearly 80 pips to test the vicinity of 1.3000 the figure.

USD/CAD weaker on oil recovery

The Canadian dollar has almost fully reverted the initial drop vs. its American counterpart following the strong recovery in crude oil prices, with the barrel of WTI currently reclaiming the $48.00 handle.

In another direction, the greenback – measured by the US Dollar Index – has managed to trim earlier gains and trade at shouting distance from opening levels around the 95.00 mark, while Fed’s Bullard now sees the US economy expanding at a 2.5%-3%, paving the way for further USD strength.

USD/CAD levels to consider

As of writing, the pair is up 0.10% at 1.3011 with the initial resistance at 1.3095 (Fibo 23.6% of 1.1916-1.3458) followed by 1.3181 (55-day sma) and finally 1.3458 (11-year high Sep.29). On the flip side, a breakdown of 1.2911 (100-day sma) would aim for 1.2900 (low Oct.9) and then 1.2869 (Fibo 38.2% of 1.1916-1.3458).

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