The USDCAD is seeing some backfilling to the downside today helped by the increase in oil prices. Looking at the hourly chart above, the price has now moved back below its 38.2% retracement of the move up from last week's low at 1.29817 and looks toward the rising 100 hour moving average 1.29567.
Recall from Tuesday, the price moved above that 100 hour moving average (blue line), and then the 200 hour moving average (green line in the chart above), and buyers moved into the currency pair pushing the price to the highest level since November 2020. That high took out the high price from June 17, but only by about 4 – 5 pips. Yesterday the high price fell short of the high from Tuesday leading to some modest selling on the break disappointment. Today the selling has increased with the rise in the crude oil prices
Technically, a move below the 100 hour moving average at 1.29567 would now be needed to give sellers more control. Conversely holding the level, would keep the buyers in control in the intermediate term. Key level for both buyers and sellers.
AS mentioned, the price of WTI crude oil futures have been moving higher today (helping the rise in the CAD and decline in the USDCAD), and is trading around $103.40 AFTER a higher than expected build in oil inventories announced over the last few minutes of trading. The high price did extend to $104.26 (before the inventory data), and just ticked back down to $103.11 before bouncing modestly to the upside.
This week, the price of crude oil moved down to a low of $95.13 (during yesterday's trade). That was the lowest level since April 12. The rebound today saw the price extend above the $100 level, and that break helped to turn sellers into buyers (see 5 minute chart below). It also helped to push the USDCAD lower (higher CAD).
If the inventory data is able to push the price of oil back down, that could slow the USDCAD's decline. Nevertheless, keep an eye on the 100 hour MA for technical clues. If the level is broken, that would hurt the buyers (CAD sellers). The price of the USDCAD is trading at 1.2973.
On the topside, watch the broken 38.2% at 1.29851 for a more bullish intraday clue. Move back above would give the dip buyers some comfort in the short term, and would have traders looking the natural resistance at 1.3000 next.
