USD/CAD on the bids near 1.3450 as WTI benefits from US-Iran tension, OPEC+ meeting

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  • Geopolitical plays and OPEC+ support for production cut helps energy prices.
  • Removal of the US steel and aluminum tariffs from Canada also plays positive for the Loonie.

With the escalation in the US-Iran tension and OPEC+ leaders’ firm support for extended production cut favoring crude prices, the USD/CAD pair is trading near 1.3455 at the initial Asian session on Monday.

Relationship between the US and Iran is likely inching towards war after latest reports from the Sky News revealed that a “rudimentary rocket” has been fired into the Green Zone near the US Embassy in Baghdad, Iraq.

On the other hand, the Organization of the Petroleum Exporting Countries (OPEC), Russia and some other non-OPEC oil producers have agreed to extend their previous output cut despite Geopolitical tensions between the US and Iran during their recent meeting.

Crude is the largest export item for Canada and any positive news reports for the energy front helps the Canadian Dollar (CAD) as well.

Also adding to the sentiment was the optimism at Canada due to the US calling back its steel and aluminum tariffs from the nation.

Traders have little to look forward during the day on the economic calendar and hence might keep focusing on the global political for fresh impulse.

It should also be noted that Canadian markets are closed on Monday due to Victoria Day.

Technical Analysis

The 1.3500 round-figure continues to act as an important upside barrier for the USD/CAD pair, a break of which can escalate its recovery to 1.3550 and then to 1.3565 until then 50-day simple moving average (SMA) near 1.3400 and 1.3340 level comprising 100-day SMA could still be on the market radar.

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