USD/CAD tumbles below 1.2850 as stocks and crude oil prices rise

• Canadian dollar strengthens versus US dollar amid risk appetite.
• USD/CAD falls for the second day in a row, turns negative for the current week.

The USD/CAD accelerated the decline during the American session as US stocks rose further and amid a rally in crude oil prices. The pair dropped to 1.2840, hitting the lowest level since Friday. It remains near the lows, under pressure.

On the downside, the 1.2835 region emerges as the next support, followed by 1.2800. The 1.2865 level has become now the immediate resistance.

WTI up, Wall Street green

The Dow Jones is rising 0.50% and the Nasdaq gains 0.71%. The WTI barrel is up by almost 1%, hovering around 71.60%. The improvement in risk sentiment, combined with modestly lower US yields are keeping the US dollar under pressure.

Economic data from the US showed the US economy grew at a 2.3% rate during the third quarter, above the 2.1% previously reported. Conference Board’s index of consumer confidence climbed to 115.8 in December from 111.9 in the prior month. The dollar did not benefit from the numbers.  The key day regarding economic data will be Thursday. IN the US, the Core CPE and jobless claims numbers are due.

In Canada, GDP figures are due. “GDP should print slightly below flash estimates at 0.7% in October, with a solid performance across goods and services. Manufacturing (autos) and energy will help drive the former, while services should see slightly softer growth. A 0.7% print will bode well for Q4, but we will also be watching new flash estimates for insight towards November and the early impact of the BC floods”, mentioned analysts at TD Securities.

Technical levels