USD/CAD has kicked off the new week with a leap to 1.3585. The move is a jump of over 1% on the close on Friday, sending the currency pair to the highest levels since January 2019.
The Canadian dollar is sold off as oil prices are set to plunge. Saudi Arabia will reportedly raise oil output and reduce the price of petrol exports in a bid to capture a higher market share. It is thus opening a “price war” against its rival Russia. Talks between OPEC countries led by the Middle-Eastern kingdom and non-OPEC countries led by the successor to the Soviet Union collapsed on Friday.
Saudi Arabia sought to extend and deepen the multi-year agreement to curb production of the black gold amid prospects for falling demand due to the spread of coronavirus. Respiratory disease has been spreading around the world and causing major disruptions. Crude prices tumbled on Friday, carrying the loonie with them. An extension of this fall is on the cards for Monday.
Here is how Dollar/CAD looks on the daily chart. With this jump, the currency pair surged above the May 2019 high around 1.3565. The next target is 1.3660. Support awaits at 1.3465, a peak seen in late February.
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