USD/CAD inter-markets: sales set for 1.35?

USD/CAD is advancing for the second consecutive week so far, reaching levels last seen last March in the vicinity of the 1.3400 handle.

The resilience surrounding the greenback around 9-month tops plus some weakness seen in crude oil prices in recent session have collaborated with the upbeat momentum around spot.

In fact, the barrel of West Texas Intermediate has deflated from last week’s YTD tops in levels just below the $52.00 mark and is now looking to stabilize around the $49.00 limestone, weighing on CAD.

In the meantime, yields in US money markets continue to fuel the dollar’s momentum, always backed by the increasing perception among investors of a rate hike by the Federal Reserve in December. In the same direction, CME Group’s FedWatch tool signals the probability of such scenario at almost 70%, a tad lower than yesterday.

That, plus uncertainty around crude oil in light of the upcoming OPEC meeting in November should give the pair extra oxygen, finding the next relevant hurdle at 1.3575 and then 1.3839, where are located retracements from the 2016 drop.