The loonie gains on the back of higher oil prices
And that sees USD/CAD touch a low of 1.3013 on the day, testing the 100-hour MA (red line) at the moment. Move below and near-term bias turns more bearish. But the key here is to hold a firm daily close below the 1.3000 handle.
Currently, upside momentum is also capped by the 100-day MA – at 1.3046 – so that is preventing any gains in the pair so far since Friday.
I’m not really buying into this spike in oil prices here as the Saudi officials cited offered little to no details of note as to how the kingdom wants to push prices towards those levels. It’s pretty similar to what they have talked about at the start of the month here.
Something looks amiss if you ask me but I don’t see this headline being enough to push Brent beyond $80 and WTI beyond $70 at this point.
As for USD/CAD, the loonie will still be driven by NAFTA talks ultimately and right now there still isn’t much details on whether or not a deal will be reached any time soon. That should continue to keep the pair underpinned but hopes of a deal should also prevent the pair from rising too high as traders will be cautious about getting caught out by headline risks.