Loonie Ahead of OPEC meeting

USDCAD, Daily

Front-month WTI crude prices logged a new one-month high at $51.25, since settling modestly below here. News of North Korea test firing another missile had little impact however, demand has picked up after prices wobbled on Friday following weekly data showing an 18th consecutive rise in the U.S. oil rig count. Markets are anticipating this Thursday’s OPEC meeting will affirm a nine-month extension in the 1.8 mln barrel-a-day output reduction, which has been in place since the start of the year and is due to finish at the end of June. Crude prices have gained 4.7% over the last week, largely on this anticipation of this with the likes of Saudi Arabia, Kuwait and Russia having indicated agreement on the extension. President Trump continues his trip after reportedly making signing over $200 bln in deals in Saudi Arabia.

As WTI crude futures traded over $51.00, the Loonie printed one-month lows of 1.3500, by the weak dollar and the general mixed risk backdrop which seem to weigh on the pairing. By European Market opening today, USDCAD traded below Friday’s closed and below the 1.3500 key level. The pair broke down the 50-Day EMA and the low Bollinger Bands and it is currently at 1.3490 area. The RSI is at 41 sloping down, while Parabolic SAR remain negative.

Hence these along with President Trump on world tour and with Oil prices on gain, Short position was taken at 1.3491, by considering that pair is likely to continue its downtrend at least until OPEC meeting. Based on 14-days ATR, daily targets where set at 1.3400 (confluence also of 38.2 Fibonacci level) and 1.3320 (confluence also of 200 Day EMA). Support was set at 1.3650.