USD/CAD Remains High After the Oil Spike

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The Canadian dollar reached a 14 month high against the greenback thanks to QE3. However, part of these gains are now fading away.

One of the reasons was a mysterious plunge in oil prices, despite rising tensions in various parts of the world. A disappointing Canadian figure didn’t help either.

USD/CAD now trades around the 0.9740 line, unable to stick to lower ground:

Canadian dollar retreating against USD September 18 2012

Canadian dollar retreating against USD – Click image to enlarge

Oil prices also enjoyed QE3, with WTI Crude reaching the magical number of $100. However, in a not-so-busy time in the markets, the price suddenly fell by around $4.5 before staging a limited recovery. This spike wasn’t triggered by any specific event, and is investigated by the CFTC.

While oil saw a recovery, the loonie didn’t really make a comeback. Another disappointment came from the Canadian Foreign Securities Purchases figure. This disappointed with only $6.67 billion instead of $11.3 billion expected. At least it was better than the negative number seen in the previous month.

All in all, USD/CAD is struggling to find a direction after the recent falls. 0.9740 remains a line of support after the pair climbed higher. A new break of this level opens the door to 0.9667 once again. In turn, this is followed by 0.96.

For more on the loonie, see the USDCAD forecast.

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.