Has the Canadian dollar ended its recovery? After a few positive days, enjoying the encouraging Canadian jobs report, the C$ is feeling the swings in oil prices once again.
While the number of rigs may be falling quite sharply, there are other factors to watch for oil prices: actual production and inventories.
Crude oil inventories in the US rose by 4.9 million barrels, more than 3.7 predicted yet in line with the API data. This is the fifth consecutive month of inventory gains. Supply of Canada’s all important commodity seems to be in abundance.
More oil means lower prices and more pressure on the Canadian dollar.
USD/CAD is trading around 1.2680, which served as resistance around the beginning of February. It reached out for 1.27 but only touched the line before retreating, at least for now. The round number of 1.28 is the 2015 high and serves as the next line of resistance. Below, 1.2560 provides support:
More: USD/CAD: Still En-Route To 1.30 – SocGen
Here is how the recent uptrend looks on the 30 minute chart:
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