- USD / CAD has reversed sharply from previous highs at 200 DMA and is back below 1.2450.
- A surge in crude oil prices has weighed on the pair in recent trading.
The USD / CAD it hit fresh four-week highs earlier in the session above 1.2480, but has since retreated below 1.2450 again amid current strength in crude oil prices. Crude oil prices have rebounded in recent trade, which has been a tailwind for the Canadian dollar dependent on energy exports, with WTI prices now recently advancing towards $ 84.00 from session lows at 82.00. $.
The technical selling of the USD / CAD is also playing an important role. The pair retested its 200 day moving average at the 1.2480 area and the level was again rejected. But the selling pressure has eased with USD / CAD finding support in the form of an uptrend that has been in play since late October. If prices break this downtrend and crude oil prices continue to advance, that would open the door for a move towards 1.2400, which also coincides with the USD / CAD 50 DMA.
However, a move may have to wait until the second half of the week as forex market participants will likely remain reluctant to place big bets ahead of the major US consumer price inflation report. Wednesday, which could cause turmoil for the US dollar. In terms of Canadian economic events, aside from a speech by BoC Governor Tiff Macklem on diversity at 22:45 GMT on Tuesday, there is nothing major on this week’s schedule, which should ensure that the pair will trade in function of the USD and the dynamics of the oil market.
Crude oil rallies
Crude oil prices have rebounded since the US EIA’s latest monthly energy outlook report was released, in which the agency increased its gas price forecasts compared to the October report. The EIA now sees regular US gasoline prices averaging $ 3.0 per gallon in 2021 and $ 2.91 in 2022, up from projections of $ 2.97 and $ 2.91 in the previous report.
It was said that the Biden administration, eager to do everything possible to lower energy prices, is also very much looking forward to analyzing the report before making any final decisions on what steps it might take to lower gas prices. . A release of crude oil reserves from the Strategic Petroleum Reserve is on the table, but commodity analysts said they thought this would only temporarily affect prices, as it does nothing to correct the supply-demand imbalance that It has already raised oil prices this year.
Technical levels
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