USD/CAD struggles around 1.3100 handle; 200-DMA last stand

Currently, USD/CAD is trading at 1.3123, down -0.36% on the day, having posted a daily high at 1.3163 and low at 1.3087.

The American dollar vs. Canadian dollar has been in a deeper not expected correction from 1.3597 (high Dec.25) amid an increased in rates by the Fed and at least, the ongoing euphoria among members to raise faster and some discussing in public 'feeling' comfortable with even 3-hikes. 

Historical data available for traders and investors, during January, indicates that USD/CAD had the pairs' best trading day at +1.71% (Jan.18) and the worst at -1.02% (Jan.17).

Oil production for 20 years

Bloomberg reports, "The U.S. president signed documents to advance the project Tuesday, more than a year after his predecessor Barack Obama rejected it on grounds it would contribute to climate change. The decision follows the Canadian government’s approval in November of Kinder Morgan Inc.’s Trans Mountain line to the Pacific and Enbridge Inc.’s expansion of Line 3 to the U.S. Midwest."

The report continues, "The three lines would add 1.8 million barrels a day of crude export capacity, enough to handle Western Canada’s growing oil production for 20 years, according to National Energy Board projections. That would add more than $4 billion a year to Western Canada’s economy by making the region’s crude more valuable relative to other grades, Tim Pickering, founder and chief investment officer of Auspice Capital Advisors Ltd. in Calgary, said in a phone interview. Because of the lack of capacity, refiners haven’t paid as much for Canadian crude."

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 1.3270 (100-DMA) and above that at 1.3330 (50-DMA). While supports are aligned at 1.3086 (today's low) and below that at 1.2980-50 region (horizontal support). On the other hand, Stochastic Oscillator (5,3,3) seems to head south towards the oversold territory. Therefore, there is evidence to expect further dollar losses in the near term. 

On the medium-term view, the 50-SMA moves closer and closer to the USD/CAD 100-SMA which indicates a cross formation; an indication to expect a massive dollar sell-off? Over the last 10-months, the 100-SMA on the weekly chart has provided critical support in the pair uptrend capped at 1.3597 (high Dec.25). If prices were to open and close below such important line of defense the US dollar perspective changes on the spot. To the downside, supports are aligned at 1.2790-60 region (horizontal support) and below that at 1.2475 (horizontal support) near 1.2460 (low May 2016).

A mixed bag of Trumpian stuff