USD/CAD breaks above 1.3300 as the recovery strengthens and crude oil tumbles

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  • Greenback rises across the board, while the Loonie tumbles on crude oil slide. 
  • USD/CAD extends daily gains to 50 pips, up almost a hundred pips from Monday’s low. 

The Canadian Dollar is among the worst performers of the American session weakened by the ongoing sell-off in crude oil prices. The WTI barrel is moving closer to YTD lows as USD/CAD breaks decisively above 1.3300. 

The USD/CAD broke above 1.3305 and jumped to 1.3326, reaching the highest level since Friday when it collapsed after the NFP report. The recent leg higher is being supported by a stronger US Dollar and the decline in crude. 

The DXY is up 0.25%, trading near 97.00 while crude oil is accelerating to the downside.  The WTI barrel is falling 3.65% at $50.60, slightly above the June low. If it drops under $50.40 it would be trading at the lowest since January, increasing the odds of a breakout below $50.00. 

From a technical perspective, the recovery in USD/CAD is gaining traction. The positive tone will likely remain in place while price holds above the immediate support now seen at 1.3300. Below that level, the bullish pressure would ease. The next support lies at 1.3275. On the upside, the next barrier for the recovery is 1.3345 followed by 1.3375. 

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