USD/CAD: bears get short-changed, but recovery is shallow

USD/CAD has been in decline this week correlated to the price of Oil that penetrated in to the $50bbl mark in the case of WTI for a high of $50.23. 

Atthe same time, the U.S. dollar has continued to come off its northerly trajectory also correlated to oil and hence the supply in USD/CAD and a bid for the Loonie across the board was helped along by the BoC leaving rates on hold earlier in the week. Today's US session did, however, offer a respite to the bears case when oil dropped and the Loonie followed in the same fashion by almost a cent, but analysts look to fade rather than to back the bid.

USD/CAD still a sell on rallies to 1.3300 – Westpac 

USD/CAD bullish above 1.2800 – Scotiabank

Focus now truns to Yellen tomorrow as markets start to price out a Fed hike in June; some further clarrity on timings of a rate hike from Yellen might be expected. 

USD/CAD levels

USD/CAD recovered to highs of 1.3004 and through the 20 sma on the hourly chart and the 100 on the 4hr sticks, breaking the steep descending 4hr resistance. Price now moves into consolidation south of the 1.30 handle again with the 20 sma on the 1hr time frame acting as a support at 1.2973 ahead of 1.2958 previous stick lows and London lows of 1.2910. "Key retracement levels are the 38.2% Fibo around 1.29 and the 50% retracement near 1.2820."To the upside, the 200 sma at 1.3042 and yesterday's early Asian sessions highs comes as a resistance.