USD/CAD Weekly Analysis

USD/CAD failed in its attempts to pierce through the 1.3700 resistance area. This is the second failed attempt in the last two weeks, the previous one falling just short of the 1.36920 mark.

At the moment, it really is a tug of war between USD and CAD bulls, which seem to be canceling each other out. On the surface, it does appear the USD is a more attractive proposition, but given the current climate, the CAD has been able to hold its own. The CAD is largely deriding its strength from higher oil prices, as the drop in inflation and stagnation in retail sales should’ve aided the bulls in facilitating a break above the 1.3700 mark.

In other words, the longer there is concern about escalation in the Middle East, the US dollar and oil prices are likely to remain supported. This in turn could mean more range-bound price action for USD and CAD. An improvement in sentiment, however, could be just what the doctor ordered for CAD bulls to look at: a push toward the 1.3500 mark and potentially lower.

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