FxWirePro: USD/CAD extends decline, vulnerable to more downside

• USD/CAD extended decline on Tuesday as investors focused on higher oil prices rather than an escalating trade war between the U.S. and Canada.

• Canada’s retaliatory tariffs on U.S. goods came into effect after midnight, escalating the 18-month-old trade dispute and prompting Prime Minister Mark Carney to call for further efforts to reduce the country’s reliance on its largest trading partner.

• U.S. President Donald Trump said on Monday that Canadian private jet manufacturer Bombardier would be barred from selling its aircraft in the United States unless the company begins manufacturing planes domestically.

• Last week, the Bank of Canada said it did not expect the latest U.S. tariffs to have a significant direct impact on the Canadian economy, while warning that the ongoing conflict in the Middle East had increased upside risks to the inflation outlook..

• U.S. crude oil futures CLc1 touched a three-month high at $94.73 a barrel on Tuesday after Iran-backed Houthis in Yemen attacked Saudi energy facilities. Oil is one of Canada's major exports..

 •  Immediate resistance is located at 1.3798(50%fib), any close above will push the pair towards 1.3848(SMA20.).

• Support is seen at 1.3732 (Lower BB) and break below could take the pair towards 1.3702(38.2%fib).

Recommendation: Good to sell around 1.3800 with stop loss of 1.3850 and target price of 1.3740