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USD/CAD completes roundtrip, rises back to 1.4100 area

FXStreet (Córdoba) - A series of headlines about a proposal to cut global oil output sent USD/CAD briefly below 1.4000 as the loonie surged in tandem with oil prices, but the pair quickly return to previous levels as the reports were later denied.

USD/CAD broke below 1.4000 and moved to a low of 1.3946 as WTI futures rallied to $34.82 a barrel, but then turned around, with the pair climbing back to the 1.4100 zone and erasing intraday losses. At time of writing, the pair is trading at 1.4075, virtually unchanged on the day.

From a wider view, USD/CAD is near completing a full retracement of its 2016 rally, as the pair has been correcting lower ever since reaching a 13-year peak at 1.4689 on Jan 20.

USD/CAD levels to watch

As for technical levels, next supports are seen at 1.3946 (Jan 28 low), 1.3900 (psychological level) and 1.3841 (50-day SMA). On the flip side, immediate resistances could be found at 1.4121 (Jan 28 high), 1.4155 (Jan 27 high), 1.4221 (20-day SMA) and 1.4299/1.4300 (Jan 22 high/psychological level).

The start to this year has been significant - TDS

Analysts at TD Securities explained that this is starting to feel familiar. It’s only January, and already a significant downturn in oil and diffuse EM risks are weighing on 2016 forecasts—particularly inflation. "But this year, it won’t be central banks to the rescue. At best, we get a gradual tilt toward easing after the Fed for the first time hiked into a global slowdown."
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Sharp decline in Durable Goods - Nomura

Analysts at Nomura explained that the Census Bureau reported today that total US durable goods orders declined by 5.1% in December, well below expectations (Nomura: -0.2%, Consensus: -0.7%).
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