USD/CAD trades heavy as oil clocks two-week high

• CAD on the rise, tracking uptick in oil.
• USD on the back foot across the board.

Having created a bullish outside day candle on Friday, the prospects further gains in USD/CAD looked good, however, the uptick in oil prices seems to have played a spoilsport.

As of writing, the USD/CAD is trading lower by 22 cents or 0.18 percent at 1.2535. The Canadian dollar may have found some love in Asia as the US oil prices clocked a two-week high of $62.30 per barrel.

Meanwhile, the greenback is reporting moderate losses across the board. China has threatened retaliation if the US imposes tariffs on their aluminum, according to Bloomberg. This could boost fears of a full-blown trade war and keep USD on the back foot during the day ahead. Also, trading volumes may drop as US markets are closed on account of President's Day.

USD/CAD Technical Levels

A positive follow-through to Friday's bullish outside day candle would signal the rally from Jan. 31 low of 1.348 has resumed. In such a scenario, the spot could target 1.2689 (Feb. 9 high) and 1.2729 (200-day MA).

On the other hand, a close below Friday's low of 1.2450 would shift risk in favor of a re-test of 1.2355 (Jan. 5 low) and 1.2247 (Jan. 31 low).