The Canadian dollar rallied hard after latest headlines hit the wires on the OPEC output cut deal extension, knocking-off USD/CAD to daily lows of 1.3669.
The USD/CAD pair halted its minor-bounce near 1.3720 levels and came under aggressive selling pressure, as the Loonie spiked in an immediate reaction to a 1.5% jump in oil prices. Oil prices soared in Asia amid latest reports that Russia and Saudi Arabia agree to extend the output cut agreement until March 2018.
The headlines were enough to rescue the CAD bulls from above 1.37 handle, while comments from an OPEC source, noting that oil inventory in floating storage has declined by a third since the start of 2017, further boosted the bid tone around oil and CAD too.
Meanwhile, the US dollar continues to trade muted against its main competitors, consolidating the downside after Friday sell-off, fuelled by weak US retail sales and CPI data. In the day ahead, we have second-tier data from the US docket, however, oil price-action is expected to remain the main driver today.
USD/CAD Technical levels
The next resistance can be seen at 1.3722 (daily top), 1.3750 (psychological levels) and 1.3795 (multi-week tops). Next support to the downside can be found at 1.3658/50 (20-DMA/ May 11 low), 1.3600 (zero figure) and 1.3528 (Apr 27 low).
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