USD/CAD hits fresh weekly lows below 1.3000

Higher crude oil prices and lower US dollar sent USD/CAD under 1.3000.
Mexican and Canadian officials rise NAFTA optimism, however, a deal has not been reached yet.

Matías Salord FXStreet

The USD/CAD dropped further during the US session amid a weaker greenback and as NAFTA talks take place. The pair dropped further and bottomed at 1.2979, reaching the lowest since August 31.

The loonie is being supported by higher crude oil prices, NAFTA expectations and today, particularly by a weaker US dollar. The WTI rose to $71.25 today, a weekly gain of $4. Regarding NATA, the latest headline from Reuters signaled that the most-optimistic scenario is a deal in principle next week.

The main driver today has been so far US Dollar weakness. The greenback was moving lower on the back of an improvement in emerging markets and accelerated after the release of lower-than-expected PPI data in the US.

USD/CAD Levels to watch

The short-term tone now favors the downside. The bearish momentum remains strong but some short-term technical indicators are showing oversold conditions after the pair lost more than 150 pips in two days.

To the downside, support levels might be located at 1.2780 (Sep 12 low), 1.2950 and 1.2935. On the upside, resistance could be seen now at 1.3020, 1.3040 (Sep 11 low) and 1.3075 (Sep 12 high).

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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