It’s been a volatile session in the USD/CAD pair, as the market continues to price in the idea of oil markets moving on war headlines.
USD/CAD
It’s been a pretty wild trading session during the last 24 hours in the US dollar against the Canadian dollar, but we have turned around completely. So, it looks to me like we are still going to continue to see a lot of reaction to the 1.3750 level and as a result I think you have to look at this as a market that has an obvious barrier that if we can break above there then we could go looking to the 1.39 level.
If we fall from here the 1.36 level underneath is likely to continue to be a major support level and then after that you could look at the 1.35 level. Overall oil rallying the way it has does help the Canadian dollar and with that being the case you have to look at the Loonie in these times. However, it’s a little different against the US dollar due to the fact that people will run to the US dollar for safety which is what we saw to kick off the session.
Potential Market Outlook and the Role of Oil
All things being equal, I think this is a market that will continue to be very noisy, but I also recognize that there is an obvious barrier that if we can get above then we could really see money flowing in here that would almost certainly be in a major risk-off type of environment.
The oil factor in this particular pair isn't as strong as it once was because quite frankly the United States produces almost 14 million barrels a day. So, while the Canadians produce a little heavier grade which is kind of out in the weeds there but something that you should think about the reality is in general the oil factor isn’t what it used to be here.