With no economic data released from Canada, the loonie will trade on demand. WTI crude oil prices reached a high yesterday of 66.69 and are currently trading at 65.98. Crude price is expected to remain elevated but not increase as sharply as in 2017, the IEA’s monthly report states. The agency expects 2019 demand to stay in line with this year's 1.4 million barrels per day.
As trade tensions between Trump and Trudeau remain elevated and oil prices edging lower short-term outlook for the loonie is for it to trade lower against its counterparts. The loonie weakened more than 0.2% versus the USD, on the back of broad greenback strength. USDCAD rose back above 1.30, ending the session trading around 1.3015 following recent rumors surrounding the next FOMC meeting, which helped to boost the USD.
From a technical perspective, USDCAD will need to break above first resistance around 1.3040 for it to reach March highs of 1.3125. On the downside, a break of 1.2910 (the 20-day moving average) should act as support, and if broken we could see the loonie strengthening towards 1.2850.