- Escalating geopolitical tensions lifted Oil prices sharply higher and led to a bearish gap opening.
- As Oil prices cooled off, a modest USD uptick helped find decent support near the 1.3200 handle.
The USD/CAD pair built on its steady intraday climb and moved back above mid-1.3200s, recovering a major part of the weekly bearish gap opening.
Drone strikes on the world’s largest crude-processing facilities in Saudi Arabia triggered a sharp intraday upsurge in Oil prices, which eventually provided a strong boost to the commodity-linked currency – Loonie and led to the pair’s big weekly bearish gap opening.
Oil eases from tops/stronger USD helped gain traction
The pair erased all of its strong gains recorded on Friday, supported by upbeat US monthly retail sales data, though a combination of factors helped the pair to find decent support near the 1.3200 handle and stage a solid intraday recovery of around 60-pips.
As Oil prices cooled off daily tops, now up around 8% as compared to earlier intraday gains of nearly 20%, a modest pickup in the US Dollar demand seemed to be one of the key factors lending some support, rather attracted some meaningful buying interest at lower levels.
It, however, remains to be seen if the pair is able to capitalize on the recovery move or runs out of the steam at higher levels amid firming expectations that the Fed will ease further later this week and absent relevant market-moving economic releases – either from the US or Canada.
Technical levels to watch
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