USD/CAD consolidates bearish gap amid 5% WTI rally

The Canadian dollar keeps the range near two-month highs against its American counterpart in the late-Asian trades, with USD/CAD hovering ahead of 1.31 handle.

USD/CAD dumped on Oil rally

Currently, the USD/CAD pair is last seen exchanging hands at 1.3123, down -0.50% so far, having posted fresh two-month troughs at 1.3115 in early deals. The major opened with a bearish gap in Asia this Monday, as oil prices spiked over 4% after the Asian traders cheered the oil output cut deal between OPEC and non-OPEC deal was reached over the weekend.

While Saudi Arabia’s commitment for aggressive cuts also added to easing oversupply worries, bolstering the bids for the black gold, and thus, eventually lifting the demand for the resource-linked Loonie. Oil is Canada’s top export product.

The bearish momentum seen behind USD/CAD is also partly attributed to the subdued trading activity in the US dollar against its main competitors.

Looking ahead, the major will get influenced by the sentiment around oil markets and upcoming US macro releases due on the cards this week. While the main market moving event for the spot this week remains the FOMC rate decision.

USD/CAD Technical Levels

To the upside, the next resistances are seen near 1.3157 (daily R1) and 1.3172 (5-DMA) and from there to 1.3200 (round number). To the downside, immediate support might be located at 1.3100 (round figure) and below that at 1.3085 (200-DMA) and at 1.3050 (Oct 18 low).