Forex: Oil pulls CAD weaker, down 12 pips versus greenback

on December 13 2009 10:24 PM (London) - Canada, the snowy state, has recently seen positive economic indicators from macro news flow, including better-than-forecast jobs figures.

The Canadian dollar is closely tied to oil, one of the countries major exports. They have the world's second largest oil reserves, behind only Saudi Arabia. As a next exporter of oil, strong oil prices support the currency, and we see a strong positive correlation there.

CAD loses 12 pips versus Dollar, trading 1.0596/9

In this session USD/CAD has traded sideways and tightly range bound, moving in a slightly bullish channel. Oil weakness has continued as WTI front month shed nearly 90 cents to currently trade at 69.03/8, we attribute this as the causal factor behind CADs weakness midway through the Asian session.

The pair is currently trading at 1.0596/9. For resistance and support we look to Friday's high on the upside 1.0612 and our primary support barrier we take as today's low, 1.0564.


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