- USD/CAD has been better bid since the FOMC statement and a resurgence in the greenback, now eyeing July highs 1.3290 and then June highs at 1.3387.
- USD/CAD bulls are also benefiting with the price of oil in free-fall. Last week there were reports that the Saudi’s were studying a break up of OPEC.
USD/CAD is currently trading at 1.3218 with a high of 1.3228 from a low of 1.3182 and has been supported on WTI extending losses down to a low of $59.90bbls from $61.45bbls. The fall comes as the major oil producers have discussed a potential reduction to crude production while concerns over growth in output combined with expectations for a slowdown in demand mount up.
A complex mix of fundamentals supporting the upside
This comes at the same time as the resurgence in the greenback and also upon reports suggesting USMCA talks had hit a bump in the road. Analysts at Scotiabank explained that this is not unusual perhaps in the context of a complex agreement that is now being turned into legal text, “but the risk of renewed trade tensions (and the prospect of a delay in lifting of steel and aluminum tariffs) is clearly unhelpful for CAD sentiment, with investors having thought this issue had been put to rest.”
USD/CAD levels
The analysts explained that USD/CAD key resistance comes in at 1.3325 (Sep high) but then little until the mid-year peaks (1.3290 and 1.3384). Support is 1.3155/65. Below there, nearby support would be 1.3020 and then the August and September lows as well as the 200 day moving average at 1.2928/882.
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