USD/CAD Shrugs Off OPEC Oil Production Cut

Yesterday’s Organization of the Petroleum Exporting Countries (OPEC) meeting ended with the announcement that oil producing countries will cut production for the first time since 2008. This decision, agreed both by OPEC and non-OPEC, aims the well-being and health of the world economy and was started to be discussed since the last OPEC meeting in September. The announcement was for a cut of 1.2 million barrel a day, though, the OPEC President Mohammed Bin Saleh Al-Sada did not list the countries that will reduce their production.

USD/CAD – Technical Outlook
The OPEC decision of cutting production did not affect a lot the USD/CAD pair as during yesterday’s session the pair ended the day near its opening price. The commodity pair plunged near the 1.3360 support level which overlaps with the 50-daily SMA and had a pullback on the bearish crossover of the 50-SMA to 100-SMA on the 4-hour chart.

On the daily chart, the pair is establishing in an ascending move since May 2016 and hit a fresh eight- month high, early in November. After the strong rebound on the 1.3590 resistance barrier the price dropped more than 1% and met the 1.3360 barrier. The latter level and the 23.6% Fibonacci retracement level will be strong obstacles for further downside movement. For the long-term traders, a penetration of the aforementioned obstacles will open the door for a test of the rising trend line on this chart. Technical indicators are endorsing the bearish thought since both are falling and are approaching the negative area.

Going to a lower timeframe, currently, the pair is developing below the short-term trend line as well as below the 200-SMA which is near the 1.3400 psychological level. The next levels to watch for intraday traders are the 1.3360 handle or moreover, the 1.3260 barrier. We expect oil to continue moving higher in the coming days and USD/CAD to move lower. Technical structure remains bearish as both technical indicators are following a negative path. The RSI indicator is moving below 50 while the MACD oscillator slipped below its trigger line.