FxWirePro: USD/CAD falls to one-month low, scope for further downside

USD/CAD dipped on Wednesday as oil prices jumped and recent softer-than-expected U.S. inflation data cooled expectations for Federal Reserve interest ​rate hikes. U.S. crude oil futures settled 4.5% higher at $82.49 a...

• USD/CAD dipped on Wednesday as oil prices jumped and recent softer-than-expected U.S. inflation data cooled expectations for Federal Reserve interest rate hikes. • U.S. crude oil futures settled 4.5% higher at $82.49 a barrel, extending weekly gains as escalating U.S.-Iran attacks across the Gulf fueled supply concerns. Higher oil prices supported the Canadian dollar, as crude is one of Canada's key exports.

•Domestic data showed foreign investors purchased a net C$7.90 billion ($5.63 billion) of Canadian securities in May, mainly driven by federal government bonds, following an upwardly revised C$46.92 billion in net purchases in April. • The spread between Canadian and U.S. two-year government bond yields narrowed by 3.2 basis points to around 130 basis points in favor of the U.S. Treasury, the smallest gap since June 16. • Immediate resistance is located at 1.4104(38.2%fib), any close above will push the pair towards 1.4164(SMA 20).

• Support is seen at 1.4005 (50%fib) and break below could take the pair towards 1.3972 (Lower BB). Recommendation: Good to sell around 1.4060 with stop loss of 1.4100, and target price of 1.3980