USD/CAD reverses daily losses, reclaims the 1.2800 handle amid correction in crude

USD/CAD reverses its previous losses on Tuesday and bulls reclaim the 1.2800 handle.
Crude oil is pulling back from its 2018 high.
The FOMC’s minutes on Wednesday can provide volatility to the Loonie.

Flavio Tosti Independent Analyst

The Loonie traded down in Asia and for the most part of the European session. A couple of hours before the London close, USD/CAD found an intraday low at 1.2750 then rebounded almost 70 pips and is now trading in the 1.2810 region up 0.21% on Tuesday.

CAD is tightly correlated to oil prices. Crude oil WTI benchmark hit a new 2018 high at $72.83 a barrel and then eased from the tops and is trading in the 72.10 region at the time of writing. Oil is driven by new sanctions on Venezuela by the US and impending sanctions on Iran.

Meanwhile, the US Dollar Index (DXY), which measures the greenback relative to a basket of currencies, is virtually unchanged on Tuesday but still well-supported and trading close to multi-week highs.

Investors will also take their cues from the FOMC’s minutes on Wednesday at 18:00 GMT.

USD/CAD 4-hour chart

USD/CAD is rather neutral evolving in a range between the 1.2750 and 1.2900 levels. The main moving averages are flat and the major support is seen at the 1.2750 level while resistances are seen at the 1.2850 figure and 1.2926 swing high.

Author

Flavio Tosti

Independent Analyst

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