The U.S. dollar rose to more than five-year highs against the commodity exposed Canadian dollar in last weeks trading session amid the ongoing decline in oil prices, a slack in the Canadian labor sector and also after a strong report on U.S. consumer sentiment on Friday.
Canada is a major oil exporter and the currency’s sensitivity to crude prices has intensified as prices have tumbled. The greenback also received an additional boost after data showing U.S. consumer sentiment rose to an almost eight-year high in December.
Weekly bias remains strongly bullish as 21 and 55 Exponential Moving Average are crossed upward on the 1 hour, 4 hours, Daily, Weekly and Monthly time-frames. Moreover SSRC (stochastic), MACD and RSI oscillators are also showing the bullish momentum remains intact on all time-frames respectively. More rise to 1.18000 psychological resistance is expected in the medium term picture.
In the week ahead, investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise. Friday’s reports on Canadian retail sales and inflation will also be closely watched.