USD/CAD erases nearly 100 pips on Monday, steadies around 1.4100

US Dollar Index struggles to find direction on Monday.
WTI remains on track to post heavy losses.
BoC says business confidence deteriorates in first quarter.

Eren Sengezer FXStreet

Despite the poor performance of crude oil prices on Monday, the CAD gathered strength against the USD and dropped to a daily low of 1.4085. As of writing, the pair was trading at 1.4112, down 0.63%, or 90 pips, on the day.

CAD ignores WTI selloff

The upbeat market mood seems to be helping the loonie disregard the sharp drop in crude oil prices and find demand. After the OPEC+ emergency meeting got postponed to Thursday over the weekend, the barrel of West Texas Intermediate (WTI) started to erase last week's recovery gains.

The uncertainty regarding a new OPEC+ output cut deal continues to weigh on WTI, which was last seen erasing 9.5% on the day at $26.05.

Meanwhile, global equity indexes' decisive rebound on signs of a slowdown in the rate of new coronavirus fatalities and infections in most affected regions seem to be helping risk-sensitive currencies outperform the greenback. After adding more than 2% last week, the US Dollar Index is staying relatively quiet near the 100.60 handle on Monday.

Earlier in the day, the Bank of Canada in its quarterly Business Outlook Survey noted that the business confidence was already deteriorating in the first quarter even before concerns over the coronavirus outbreak intensified.

"Firms are taking a wait-and-see approach on capital expenditures; almost all firms in tourism and food-service cutting back on renovations and purchases of machinery and equipment etc. to preserve cash," the BoC added. However, the CAD didn't have a difficult time preserving its strength despite these remarks.

On Tuesday, the IBD/TIPP Economic Optimism data from the US and Ivery Purchasing PMI data from Canada will be featured in the economic docket.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.4117
Today Daily Change	-0.0093
Today Daily Change %	-0.65
Today daily open	1.421

Trends
Daily SMA20	1.4123
Daily SMA50	1.3622
Daily SMA100	1.3385
Daily SMA200	1.3293

Levels
Previous Daily High	1.4225
Previous Daily Low	1.4094
Previous Weekly High	1.4349
Previous Weekly Low	1.3983
Previous Monthly High	1.4668
Previous Monthly Low	1.3315
Daily Fibonacci 38.2%	1.4175
Daily Fibonacci 61.8%	1.4144
Daily Pivot Point S1	1.4128
Daily Pivot Point S2	1.4046
Daily Pivot Point S3	1.3998
Daily Pivot Point R1	1.4259
Daily Pivot Point R2	1.4307
Daily Pivot Point R3	1.4389

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.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.