The loonie gains on the back of higher oil prices
And that sees USD/CAD touch a low of 1.3013 on the day, testing the 100-hour MA (red line) at the moment. Move below and near-term bias turns more bearish. But the key here is to hold a firm daily close below the 1.3000 handle.
Currently, upside momentum is also capped by the 100-day MA – at 1.3046 – so that is preventing any gains in the pair so far since Friday.
Something looks amiss if you ask me but I don’t see this headline being enough to push Brent beyond $80 and WTI beyond $70 at this point.
As for USD/CAD, the loonie will still be driven by NAFTA talks ultimately and right now there still isn’t much details on whether or not a deal will be reached any time soon. That should continue to keep the pair underpinned but hopes of a deal should also prevent the pair from rising too high as traders will be cautious about getting caught out by headline risks.