USD/CAD drops further, eyes on 1.3400

The greenback is now extending its bearish note, sending USD/CAD to test the area of daily lows near 1.3400 the figure.

USD/CAD weaker on USD-selling

The pair is coming down to test recent lows in the proximity of the 1.3400 handle, giving away nearly 2 cents since last week’s multi-month tops just below the 1.3600 mark.

The recent strong advance of the buck has prompted investors to cash up part of those gains, sparking the ongoing leg lower.

In addition, rising optimism on a potential deal to limit the oil production at the OPEC meeting in Vienna lent extra oxygen to crude oil prices, pushing the barrel of West Texas Intermediate to 3-week tops in the mid-$47.00s.

Data wise in Canada, Wholesale Sales have contracted at a monthly 1.2% during September, while US Chicago Fed National Activity Index improved to -0.08 during last month.

From the positioning perspective, speculators have barely moved from the net short territory, keeping levels in the area of multi-week highs during the week ended on November 15, according to the latest CFTC report.

Furthermore, Fed’s S.Fischer (permanent voter, hawkish) said the economy is closer to full employment (or it is there already), while argued that higher rates are a sign of confidence for the future.

USD/CAD significant levels

As of writing the pair is retreating 0.64% at 1.3417 and a break below 1.3401 (low Nov.15) would aim for 1.3311 (38.2% Fibo of the 2016 drop) and then 1.3260 (low Nov.9). On the flip side, the immediate hurdle lines up at 1.3566 (high Nov.18) followed by 1.3575 (50% Fibo of the 2016 drop) and finally 1.3590 (high Nov.14).

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