USD/CAD Plunged As Oil Prices Rally Upwards

The rally of the Canadian dollar hogged the limelight yesterday and is attributed to the strong increase of the oil in the last ten days. After signals that the OPEC and non-OPEC oil output cuts failed to limit the glut of the commodity, the Brent crude oil bottomed at $46.75 a barrel and then started rising on continues apace. Yesterday, the world’s two top oil producers, Saudi Arabia and Russia, reached an agreement to extend the oil production cuts for more nine months, until March 2018, pushing the prices further higher.


The USD/CAD currency pair plunged over 0.7% this week and ended Monday’s trading session in red, meeting the significant psychological support level at 1.3600. A penetration of that level will lead the pair price to 1.3530 and then even lower at 1.3455.

Looking on the longer-term timeframe, the commodity currency pair is creating an uptrend the last one year, since May 2016. Shifting back to the short-term timeframe, the technical indicators are confirming the continuation of the bearish move. MACD oscillator is declining and is still developing below its trigger line while the stochastic oscillator is headed towards the oversold area. In addition, RSI slipped below the overbought area and is moving towards 50 level with strong negative momentum.


Analysis by JFD Research