The Canadian dollar strengthens against the greenback during the final session of the year amid slight improvement in the risk appetite. Some analysts expect that a potential recovery in oil prices could support the Loonie in 2023. Demand for oil is expected to increase if China will continue its reopening measures. It is worth noting that Canada is a leading oil exporter to the United States and higher oil prices should strengthen the Canadian dollar. A Reuters survey of 30 economists and analysts show that WTI crude would average around $84.84 next year.The USDCAD pair is on track to book nearly 7% yearly gains. The pair rose sharply in the first half of the year, supported by hawkish FED and worries over global economic slowdown. However, in recent months, the pair pulled away from two year highs around 1.3980 amid growing speculation that FED may slow down its monetary tightening cycle due to recession concerns. During today's session USDCAD once again pulled back to key support at 1.3510, which is marked with previous price reactions, 200 SMA (red line) and 38.2% Fibonacci retracement of the downward correction started in October 2022. Should break lower occur, downward move may accelerate towards the 1.34 mark, where the lower limit of the 1:1 structure and 23.6% retracement are located. On the other hand, if buyers manage to regain control, nearest resistance to watch can be found around 1.36 and 1.37 levels.
USDCAD, D1 interval. Source: xStation5
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