USD/CAD – Caught Between Weak Oil and Weak US Dollar

The US Dollar eased against the Canadian Loonie to 1.4480 from 1.4530 yesterday. USD/CAD traded to an overnight low at 1.4375 before bouncing to its close. In early Sydney, the Dollar trades at 1.4440 Canadian. Overnight Brent Crude Oil prices stabilised at USD 29.40, after its plunge to USD 25.00 earlier this week. This is keeping the USD/CAD supported at the 1.4350 area, for now.

USDCAD 1 Y Chart - Trading View - 25 March 2020
USDCAD 1 Y Chart – Trading View – 25 March 2020

The latest COT report (week ended March 17) saw net speculative short CAD bets increased to -CAD 9,623 from the previous week’s -CAD 1,990. With the speculative market short of Canadian Dollars, a further USD drop will see the USD/CAD retreat.

USD/CAD has immediate resistance at 1.4500 followed by 1.4540. Immediate support can be found at 1.4410 followed by 1.4370. Look to trade USD/CAD from the short side with a likely range today of 1.4370-1.4510.

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