USD / CAD rises to 1.2480 from two-month lows at 1.2445

• The USD rebound from the lows of 1.2445 remains below 1.2500.
• CAD remains strong with rising oil prices.
• USD / CAD: A break below 1.2450 could lead to 1.2300.

The USD it is trying to rally on Monday after a sharp drop seen in the previous three days. The pair USD / CAD it has recovered from two-month lows at 1.2445 although, so far, it has not been able to recover with the loonie backed by higher oil prices.

The loonie remains strong as crude prices hit new highs

The loonie has not been affected by the moderate strength of the US dollar seen on Monday. The Canadian dollar continues to be supported by a steady rally in crude oil, one of Canada’s top exports. The US WTI benchmark has appreciated for the eighth day in a row, hitting new 7-year highs above $ 82, while a barrel of Brent has traded above $ 84 for the first time since September 2018.

With bond markets closed on Monday, oil prices have offset the overall positive tone of the dollar. Investors have come to grips with the fact that Friday’s lackluster employment report will not deter the Federal Reserve from beginning to cut back on its bond buying program over the next several months, which has supported the USD against most of its peers.

In the absence of relevant macroeconomic releases on Monday, the market is focusing on the US CPI and FOMC Minutes, to be released next Wednesday, to better assess the Fed’s next move and set short direction. term for the USD.

USD / CAD breakout of 1.2450 will pave the way to 1.2300 – Scotiabank

According to Scotia Bank’s currency analysis team, the pair should confirm above the 1.2450 level to avoid further depreciation: “From a technical perspective, the cross may have difficulty breaking away from the 1.2450-1.2500 zone, but a Convincing drop opens USD losses to 1.24 followed by 1.23 with relative ease. “

Technical levels