- US dollar prints fresh highs across the board, DXY up by 0.55%.
- Loonie retreats as crude oil erases gains and on risk aversion.
The USD/CAD broke above 1.4015 and climbed to 1.4042, reaching a fresh daily high. Previously it corrected lower to 1.3975 following a rally in crude oil prices. As of writing, it trades at 1.4030, up more than a hundred pips for the day.
WTI retreats, and so does the loonie
The Canadian dollar rose a few hours ago when the WTI jumped toward $26.00 on news that Saudi Arabia announced additional voluntary cuts to oil production. The rally in crude was short-lived, and so the recovery of loonie lost strength quickly.
Also, a stronger US dollar boosted the USD/CAD further. The greenback reached fresh highs over the last hours against majors and even versus commodity currencies. The broad-based USD strength takes place amid higher US yields. The 10-years yield rose above 0.70%, the highest since last Thursday.
USD/CAD technical outlook
On Friday the USD/CAD posted a daily close near April lows and technicals were pointing toward a test of the critical support at 1.3850. The reversal pushed the pair far from the key level, suggesting that the wide consolidation range remains in place.
Since April the pair has been moving sideways around 1.4040, where the flat 20-day moving average stands. A close below 1.3850 would point to further losses while on the upside above 1.4150 should lead to 1.4200 and probably to a test of 1.4260/70 (mid-April high).