USD/CAD drops to multi-year lows near 1.2330 amid oil rally, USD weakness

USD/CAD fell sharply during the American session on Wednesday.
WTI climbed above $64 after weekly EIA report.
US Dollar Index stays in the negative territory below 91.00 ahead of FOMC announcements.

Eren Sengezer FXStreet

The USD/CAD pair spent the first half fluctuating in a relatively tight range around 1.2400 but came under strong bearish pressure during the American trading hours. As of writing, the pair, which touched its lowest level since February 2018 at 1.2328, was trading at 1.2339, down 0.45% on a daily basis.

CAD capitalizes on upbeat data, rising oil prices

The sharp upsurge witnessed in crude oil prices provided a boost to the commodity-sensitive loonie on Wednesday. After the weekly report published by the Energy Information Administration (EIA) revealed that crude oil inventories in the US continued to increase, the barrel of West Texas Intermediate (WTI) advanced to a fresh five-week high of $64.49. At the moment, the WTI is up 1.7% on the day at $64.05.

Meanwhile, the data published by Statistics Canada revealed Retail Sales in February increased by 4.8% following January's contraction of 1.1%. This reading came in stronger than the market expectation of 4% and helped the CAD outperform its rivals.

On the other hand, the US Dollar Index (DXY) lost its traction ahead of the FOMC's policy announcements and allowed USD/CAD to extend its daily slide. Currently, the DXY is posting small daily losses at 90.88. Although the FOMC is not expected to make any changes to its policy settings, investors will keep a close eye on Chairman Jerome Powell's remarks regarding the economic outlook and will look for clues regarding the timing of tapering.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.234
Today Daily Change	-0.0059
Today Daily Change %	-0.48
Today daily open	1.2399

Trends
Daily SMA20	1.2528
Daily SMA50	1.2564
Daily SMA100	1.2657
Daily SMA200	1.2919

Levels
Previous Daily High	1.2419
Previous Daily Low	1.2389
Previous Weekly High	1.2654
Previous Weekly Low	1.246
Previous Monthly High	1.274
Previous Monthly Low	1.2365
Daily Fibonacci 38.2%	1.2407
Daily Fibonacci 61.8%	1.24
Daily Pivot Point S1	1.2385
Daily Pivot Point S2	1.2372
Daily Pivot Point S3	1.2355
Daily Pivot Point R1	1.2415
Daily Pivot Point R2	1.2432
Daily Pivot Point R3	1.2445

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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