USD/CAD: capped on Saudi Prince suggesting $55bbls at tops for oil

Currently, USD/CAD is trading at 1.3716, up 0.26% on the day, having posted a daily high at 1.3759 and low at 1.3649.

USD/CAD has been making further advances in the US session to aforementioned highs but has hit a wall with WTI dropping sharply in recent trade. WTI is now below the $48bbl handle making a low of $47.29bbl ahead of today's API data.

The story with oil and the CAD is essential that the price of oil can't get through a technical and psychological key level as $55.00bbls and as such, the concerns over Canada's resilience on the sector is underpinning CAD weakness. Just today, The Saudi Prince stated that the most optimistic price level was $55.00bbls while the lowest was $45.00bbl. This coupled with concerns over NAFTA as well as the yield spread between the dollar and CAD paper is a further weight on the loonie. In the absence of data from Canada, the broader tone persists and bulls are higher still.  

FOMC meeting: no game changer for the USD

Next major risk comes in the FOMC and nonfarm payrolls. However, "BoC Gov. Poloz is scheduled to speak on Thursday in Mexico City with a speech topic titled ‘Canada and Mexico: Common Issues in Uncommon Times’," explained analysts at Scotiabank, adding, "the discussion is likely to touch upon the ‘significant uncertainties’ that have been highlighted in recent BoC policy statements and could deliver additional CAD pressure via sentiment."

USD/CAD levels

Spot is presently trading at 1.3716, and next resistance can be seen at 1.3721 (Daily Classic R2), 1.3754, 1.3759 (Daily High) and 1.3876 (Weekly Classic R2). Next support to the downside can be found at 1.3701 (Daily Classic R1), 1.3685 (Hourly 20 SMA) and 1.3640.