USD/CAD is down by 100 pips on the day to test the 1.4000 level

USD/CAD H1 07-04

The pair fell to a low of 1.3993 on the session as the dollar continues to trade softer across the board while oil prices remain underpinned on OPEC+ hopes and the more positive risk mood in trading today.

Sellers continue to keep the more bearish near-term bias after defending several tests of the key hourly moving averages over the past few sessions and finally made a move back below 1.4100 earlier and breaking key near-term support around 1.4080.

This puts price action back around support close to 1.4000-12 currently and a firm break below the figure level will open up the path towards testing the 27 March low @ 1.3922.

There are only two spots to watch in the pair in trading this week. The first, will be the risk mood in the market - which looks to still be running higher on hope. That begs the question, is there more still to come in the rally?

For now, the technical levels seem to suggest so and so does the near-term picture in USD/CAD as sellers continue to keep a more bearish near-term bias.

In turn, that doesn't bode well for the dollar if emerging market flows also stay supportive during this run higher in risk trades.

The second spot to watch will be oil ahead of the OPEC+ meeting on Thursday. In that regard, headlines are everything.

For now, there isn't much details about an agreement but if we do see one being struck later in the week then that could give oil and the loonie an extra lift - depending on what is agreed of course among OPEC+ and other producers, including the US.