USD/CAD jumps to 1.3630 on Oil sell-off, strongest since May 2017

• A +3% drop in Oil pushes USD/CAD back on to 1.36 handle, 18-month tops.
• Oil-price action likely to remain the key driver amid a lack of fresh economic drivers and thin trading.

The USD/CAD pair finally breaks the upside consolidative channel on Thursday and reaches the highest levels since May 2017 at 1.3633, as the Loonie continues to face headwinds from the oil-price sell-off.

The US oil, WTI, dropped over 3% and tested the 45 support amid mounting global growth concerns and supply glut worries, as the OPEC output cuts will come into effect next month. The resource-linked Loonie ran into offers once again near 1.3570 region and fell to the cheapest levels in 18-months beyond the 1.36 level. Canada is heavily dependent on its revenues from oil exports.

However, the bulls appear struggling to take on the upside towards the midpoint of the 1.36 handle, as the US dollar remains heavy across its main competitors amid a tumble in the US equity futures and Treasury yields, as the US political risks grow.

The immediate focus is on the US API crude stocks data due later on Thursday for fresh direction on oil prices, which eventually have a significant impact on the CAD pair, as trading remains light heading into the New Year celebrations.

USD/CAD Technical Levels