USD/CAD drops below 1.33 as WTI breaks above $70

  • Crude oil prices rally in the NA session and help the commodity-sensitive loonie gather strength.
  • US Dollar Index stays in the daily range above 94.

The USD/CAD pair came under a selling pressure in the last hour and erased its daily gains to turn negative below the 1.33 mark. As of writing, the pair was trading at 1.3290, losing 0.05% on the day.

The pair's recent fall seems to be a product of a rally witnessed in crude oil prices. According to Reuters, a senior official working for the State Department in the United States said that countries would face secondary sanctions if they were to buy oil from Iran after November 4. "We're going to isolate streams of Iranian funding and looking to highlight the totality of Iran's malign behavior across the region," the official, speaking on condition of anonymity, told reporters.

Boosted by this headline, the barrel of West Texas Intermediate added more than $2 and rose above the $70 mark for the first time in more than a month. As of writing, the barrel of WTI was trading at $70.02, adding 2.8% on the day.

The US Dollar Index, meanwhile, stays in its recent range above the 94 mark and looks to close the day in the positive territory.

Technical outlook

The initial support for the pair could be seen at 1.3260 (Jun. 22 low) before 1.3200 (psychological level/Jun. 19 low) and 1.3160 (Jun. 18 low). On the upside, align at 1.3330 (daily high), 1.3380 (Jun. 22 high) and 1.3440 (Apr. 5, 2017, high).

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