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USD/CAD hits four-month tops, around 1.3330 region

  • USD/CAD regains some positive traction amid weaker oil prices.
  • The momentum seemed unaffected by a subdued USD demand.

The USD/CAD pair finally broke down of its European session consolidation phase and jumped to four-month tops, around the 1.3325-30 region in the last hour.

Following an early dip to sub-1.3300 levels, the pair managed to attract some dip-buying interest and turned higher for the fourth consecutive session – also marking its eighth day of a positive move in the previous nine.

USD/CAD supported by weaker oil prices

As investors looked past Friday's upbeat Canadian monthly employment details, a softer tone surrounding crude oil prices undermined the commodity-linked currency – the loonie and helped regain positive traction.

Oil extended its recent bearish trajectory and remained depressed amid concerns over the hit in demand from the world’s largest importer – China – following the outbreak of the deadly coronavirus.

It is worth reporting that oil recorded its fifth consecutive week of losses, which has resulted in combined losses of more than 22% and points to a well-established near-term bearish trend.

Meanwhile, the momentum seemed rather unaffected by a subdued US dollar price action, which possibilities of some follow-through technical buying above the 1.3300 mark contributing to the positive tone.

In absence of any major market-moving economic releases, the pair seems more likely to continue with its appreciating move as the focus now shifts to the Fed Chair Jerome Powell's testimony on Tuesday.

Technical levels to watch

 

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