- Crude Oil gains but Cad left behind
- Canada’s terms of trade have improved
- USD gains proving a difficult barrier for lower exchange rates
USD/CAD has rejected from a a key daily support zone at around 1.38760.
Previously , rejections from this area have seen prices push to around 1.40000. The 8-day EMA and 20-day EMA are also pointing towards the upside, indicating potential bullish momentum to come. A double bottom at the 1.38760 also supports a move to the upside.
If prices are able to gather enough bullish momentum, it is likely the upper trendline resistance (red) will be met. This pair is currently being supported by broader USD gains.
WTI prices have extended its recovery amid reduced storage worries and less volatility in futures. It is likely WTI prices will be capable of reaching $37-40 range, perhaps then CAD prices will begin to acknowledge the gains in Oil prices and appreciate.
Broader USD gains on the back end of risk-off markets is likely to see USD/CAD push higher in the short term. This is subject to tensions between the US and China increasing.