- Oil up modestly, equities up sharply, underpinning the CAD.
- USD/CAD bullish trend intact despite the intraday slide.
The USD/CAD pair lost the 1.3400 level as the greenback is out of the market’s favor, while the Canadian currency is getting support from higher oil and gold prices, also from the nice comeback of worldwide equities. Solid employment data released last Friday sent the Loonie down to 1.3252, but the pair changed course with Wall Street’s collapse that extended into Monday. Now, US equities seem poised to recover some ground, with the DJIA trading roughly 300 points above its previous close.
Oil prices, a critical driver for the Canadian dollar, fell at the beginning of the week, despite the OPEC+ announced an extension of its output cut, a new deal to maintain the market balance. The announcement, however, was not enough to trim concerns about prospects of slowing demand. WTI currently trades at $51.63 a barrel, marginally up for the day.
The pair is bullish according to its daily chart, developing inside an ascendant channel coming from October 1st, having peaked at 1.3441 last week, flirting with the upper end of the channel before retreating modestly. A softer stance from the BOC, for sure adds to the bullish case, despite the Fed is also poised to ease in its tightening path of monetary policy. The daily high at 1.3420 is the immediate resistance, followed by the roof of the channel, today at 1.3455. Supports, on the other hand, come at 1.3360 and the 1.3320 price zone, where the pair has multiple intraday highs and lows from this last month.