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Oil is higher and above $80 for the first time since April. Bullish for the CAD.

Today, the USDCAD exchange rate is experiencing fluctuations driven by fundamental factors that are both supporting the Canadian dollar and strengthening the US dollar.

On the positive side for the Canadian dollar, oil prices are on an upward trend, with the price of WTI crude oil surpassing $80 for the first time since April. This increase in oil prices is considered bullish for the CAD, as Canada is a major oil exporter, and higher oil prices generally benefit the country's economy and currency.

However, on the negative side for the CAD, the US dollar has gained strength due to robust fundamental indicators. Notably, there have been strong job growth figures indicated by the initial jobless claims, as well as significant economic growth showcased by the GDP numbers. Additionally, durable goods orders, which reflect both consumer and business spending, displayed strong growth, and the trade balance came in lower than expected. These positive economic indicators are providing support to the USD and, consequently, weakening the CAD.

As a result of these opposing fundamental factors, the USDCAD exchange rate is experiencing a tug-of-war, leading to its current volatility. Traders and investors are closely monitoring the developments in both the oil market and the US economic data to assess the overall direction of the currency pair.

The USDCAD has recovered from its earlier lows but remains slightly lower for the day.

From a technical standpoint, the recent upward movement has pushed the price above the key 100-hour and 200-hour moving averages, situated between 1.3182 and 1.31896. This upward breach is a positive sign, indicating that buyers have gained some control in the market.

As long as the price holds above these moving averages, the bullish momentum is likely to persist. However, the next significant resistance lies in a swing area between 1.3199 and 1.32087. If the price manages to surpass this level, it would further strengthen the bullish bias and may lead traders to target the 50% midpoint of the July trading range at 1.3239.

On the other hand, if the price fails to sustain its position above the moving averages, the bias could shift back to the downside, leading to continued fluctuations in the pair. In this scenario, traders will closely watch for support levels, and any significant downturn could signal further weakness in the USDCAD.

In summary, the USDCAD has rebounded but is still showing a modest decline for the day. The price's behavior around the moving averages and key resistance levels will be crucial in determining the market sentiment and potential future movements in the currency pair.

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