USD/CAD drops to fresh multi-year lows below 1.2650

USD/CAD is falling for the second straight day on Wednesday.
WTI trades in the positive territory above $50.
USD selloff remains intact ahead of US data, FOMC Minutes.

Eren Sengezer FXStreet

The USD/CAD pair closed in the positive territory on Tuesday as surging crude oil prices helped the CAD outperform its rivals. With the oil rally remaining intact and the greenback struggling to find demand, the pair extended its slide and touched its lowest level since April 2018 at 1.2638. As of writing, the pair was down 0.2% on the day at 1.2644.

Focus shifts to US data, FOMC Minutes

Following the two-day OPEC+ meeting, Saudi Arabia announced on Tuesday that they will be voluntarily cutting their output in February and March, which will amount to 1 million barrels per day. The barrel of West Texas Intermediate (WTI) gained more than 5% and preserved its bullish momentum on Wednesday. At the moment, the WTI is trading at its highest level in more than 10 months, rising 1.44% on the day at $50.52.

On the other hand, the risk-on market environment makes it difficult for the greenback to find demand. In the meantime, the 10-year US Treasury bond yield is up more than 7% on Wednesday as investors price in a Democratic majority in the Senate. If the US T-bond yields continue to push higher, the USD could find some demand. Nevertheless, the US Dollar Index is currently losing 0.2% on the day at 89.26.

Later in the day, the ADP Employment Change, Factory Orders and Markit Services PMI data will be featured in the US economic docket. More importantly, the FOMC will release the December Minutes at 1900 GMT.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.2646
Today Daily Change	-0.0030
Today Daily Change %	-0.24
Today daily open	1.2676

Trends
Daily SMA20	1.2785
Daily SMA50	1.2946
Daily SMA100	1.3072
Daily SMA200	1.3389

Levels
Previous Daily High	1.2792
Previous Daily Low	1.2656
Previous Weekly High	1.2876
Previous Weekly Low	1.2714
Previous Monthly High	1.301
Previous Monthly Low	1.2688
Daily Fibonacci 38.2%	1.2708
Daily Fibonacci 61.8%	1.274
Daily Pivot Point S1	1.2624
Daily Pivot Point S2	1.2572
Daily Pivot Point S3	1.2489
Daily Pivot Point R1	1.2759
Daily Pivot Point R2	1.2843
Daily Pivot Point R3	1.2895

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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