As traders know, when looking at the Canadian dollar, it's never a bad idea to also take a look at oil. Historically, the correlation between these two assets was more than obvious. Although this correlation has recently taken a turn for the worse, it is interesting to note that these markets are currently close to significant technical support.

The chart below shows the evolution of the cad against the US dollar (USDCAD in blue) and the Swiss franc (CADCHF in white).

Devises

Source: Bloomberg

As you can see, these two charts provide the same information: the CAD is close to a horizontal support that has been in place for several months at 0.6455 against the CHF and around 0.7970 against the dollar. We'll be on the lookout for any sign of a turnaround to position ourselves on this currency with a view to a rebound lasting several months. Conversely, if CAD were to weaken further as oil prices continue to fall, it would be a good candidate for a short position.

In other news, the US dollar has not said its last word and is holding above its key support at 104.65 (DXY), while the EURUSD has stumbled right up against its equivalent resistance at 1.0760. Keep your eyes on these levels to determine the next major move in these currencies. Commodity currencies retreated, with the kiwi hitting resistance at 0.6000, while the aussie was unable to reach 0.6575 before recovering slightly.