USD/CAD leaps to fresh session highs on crude oil sell-off, 1.35 in sight
As crude oil came under a heavy selling pressure on OPEC headlines, the commodity-linked loonie ran through some fresh offers in the NA session, carrying the USD/CAD pair to a fresh session high at 1.3475. As of writing, the pair was trading at 1.3470, up 0.5% on the day.
Although a nine-month extension to OPEC, non-OPEC output cut deal was announced today, the fact that the output cut remained unchanged at 1.8 million barrels per day as no new countries were included in the deal, hurt crude oil, pushing the barrel of West Texas Intermediate below $50 handle. At the moment, the barrel of WTI is losing more than 4% on the day and is trading at $49.40 at the moment. However, commenting on the recent drop in oil prices, Iraq Oil Minister Jabbar Al-Luaibi said that the price fluctuations were common following the OPEC meetings.
- Russia Energy Minister: cooperation with OPEC will continue and widen
- OPEC Conference President: we can extend oil output deal in November
- OPEC Conference President: exports will drop as summer domestic use rises
On the other hand, the greenback remains resilient against it competitors on Thursday, with the US Dollar Index holding on to daily gains above the 97 mark. The pair's price action is likely to be driven by the oil performance in the remainder of the day as there are no macro data left on the calendar.
Technical outlook
The pair could encounter the immediate resistance at 1.3500 (psychological level), ahead of 1.3540 (May 24 high) and 1.3615 (20-DMA). On the downside, supports could be seen at 1.3390 (daily low), 1.3340 (200-DMA) and 1.3300 (psychological level).