The USD/CAD pair is struggling to find a direction, despite a bounce in the US dollar index. This divergence is showing some strength in the Loonie or that the Loonie’s December sell-off was likely not deserved. On top of that, crude oil WTI is weaker this morning, but it is not affecting the Loonie so far. From a technical analysis perspective, good entry levels to buy the Canadian dollar and sell the US dollar are 1.3303, 1.3321, 1.3337 and to buy the USD/CAD are 1.3226, 1.3209, and 1.3180. There is no Canadian data release today.
This morning, the Loonie might be affected by crude oil during the day, which was slipping into negative territory on the day, as European equities moved lower.
On a different note, relations between China and Canada took a turn for the worst after a Chinese court sentenced a Canadian man to death for attempting to smuggle drugs out of China. The verdict hastily handed down on Robert Schellenberg comes against the backdrop of Canada’s arrest in December of Meng Wanzhou, a top executive of Chinese technology giant Huawei at the request of the US.