USD/CAD slumps to multi-month lows near 1.3240 as oil extends rally

USD/CAD fell to its lowest level since late-February below 1.3250.
Surging crude oil prices help CAD continue to gather strength.
US Dollar Index remains deep in the red below 93.00.

Eren Sengezer FXStreet

The USD/CAD pair lost 70 pip on Tuesday and extended its slide on Wednesday with the commodity-sensitive loonie capitalizing on surging crude oil prices. As of writing, the pair was trading at its lowest level in more than five months at 1.3243, losing 0.55% on a daily basis.

The risk-on market environment on heightened hopes of US lawmakers reaching an agreement on the next coronavirus aid bill provides a boost to crude oil prices on Wednesday. At the moment, the barrel of West Texas Intermediate (WTI) is gaining nearly 4% and trading above $43 for the first time since March 6th.

On the other hand, the greenback is struggling to find demand as a safe-haven and allow the bearish pressure on USD/CAD to remain intact. Ahead of the monthly ADP Employment Change and the ISM's Non-Manufacturing PMI data from the US, the US Dollar Index is down 0.4% on the day at 92.90.

Meanwhile, the Canadian economic docket will feature International Merchandise Trade as well as Imports and Exports figures on Wednesday.

USD/CAD near-term outlook

Credit Suisse analysts think that USD/CAD face the next support at 1.3233 before extending its slide.

“Big picture, the ‘measured wedge objective’ is seen lower at 1.3206, just shy of a more important support area at 1.3202/3191,” analysts noted. “Resistance is seen initially at 1.3308, then 1.3331/35, which we look to now ideally cap. Above would ease the immediate downside pressure and see resistance next at 1.3399, ahead of 1.3421, but with fresh sellers expected here.”

Additional technical levels to consider

USD/CAD

Overview
Today last price	1.3256
Today Daily Change	-0.0063
Today Daily Change %	-0.47
Today daily open	1.3319

Trends
Daily SMA20	1.3472
Daily SMA50	1.3534
Daily SMA100	1.3807
Daily SMA200	1.3527

Levels
Previous Daily High	1.3421
Previous Daily Low	1.3318
Previous Weekly High	1.346
Previous Weekly Low	1.3331
Previous Monthly High	1.3646
Previous Monthly Low	1.3331
Daily Fibonacci 38.2%	1.3357
Daily Fibonacci 61.8%	1.3381
Daily Pivot Point S1	1.3285
Daily Pivot Point S2	1.325
Daily Pivot Point S3	1.3182
Daily Pivot Point R1	1.3387
Daily Pivot Point R2	1.3455
Daily Pivot Point R3	1.349

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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