- USD/CAD finds a cushion near 1.3500 as oil prices fall on concerns of tighter supply.
- The US dollar moves higher, while risk-sensitive currencies fall amid uncertainty over US data.
- The Canadian Dollar is expected to break out of the ascending triangle formation.
The USD/CAD pair discovers temporary support near the psychological support of 1.3500 in the European session on Monday. Canadian Dollar Finds Cushion as Oil Prices Fall After Three-Day Rally.
Oil prices remain bullish due to concerns about reduced supply. OPEC agrees to extend production cuts by the end of June. Additionally, Ukraine's drone attacks on some Russian refineries have heightened supply concerns. It should be noted that Canada is the main exporter of oil to the United States and the rise in oil prices strengthens the Canadian dollar.
Meanwhile, the US Dollar rises slightly to 104.58 amid caution ahead of US Non-Farm Payrolls (NFP) and related labor market data this week. The market is experiencing asset-specific action as risk-on currencies are lower while US stock futures have posted significant gains.
In today's session, investors will focus on the US Manufacturing PMI data for March, which will be released at 14:00 GMT. The factory data is estimated to increase to 48.4 from 47.8 in February.
The USD/CAD pair appears close to exploiting the ascending triangle pattern formed on the day. The chart pattern shows a sharp contraction in volatility. The upward boundary of this pattern is located from the December 27 low at 1.3177, while the horizontal resistance is drawn from the December 7 high at 1.3620.
The 20-day EMA near 1.3520 remains attached to the prices, indicating that consolidation is coming.
The 14-period Relative Strength Index (RSI) is oscillating within the range of 40.00-60.00, indicating indecision among investors.
The Canadian Dollar asset would see a fresh rise if it breaks above the December 7 high at 1.3620. This would take the asset towards the May 26 high at 1.3655, followed by the round level resistance at 1.3700.
On the other hand, a bearish move below the February 22 low at 1.3441 would expose the asset to the February 9 low at 1.3413. A break below this last level would extend the decline towards the January 15 low at 1.3382.
USD/CAD daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
