The Loonie rallied against the US dollar furiously around 0.50 percent following crude oil WTI price action, which reached new highs (from November 13, 2018) around the mid USD 58s, representing an increase of over 2 percent. This happened after yesterday’s news of outages in Venezuela and Iran and the coordinated OPEC-led supply curbs. This morning though the crude oil price is trading flat in mixed price action for crude oil as market participants weighed declining US oil inventories against a report showing OPEC slowed down its rate of agreed-to production cuts.
On the release side, the new housing price index for January came in at -0.1 percent when the forecast was 0 percent. However, all the lights will be on Senior Deputy Governor Carolyn Wilkins tonight who will speak before the Vancouver School of Economics and CFA Society Vancouver at 7:05pm Est.
The USD/CAD is bouncing this morning (weaker Loonie), erasing almost all of yesterday’s gains and trading at 1.3345 after it started its rally from 1.3350 in yesterday’s trading session. Right now, nearly all of yesterday’s gains are gone. Therefore, based on the charts, the USD/CAD seems to have had a “capitulation” day yesterday, and it might be restarting its uptrend. For today, we expect a strong support level around 1.3322 and even a 1.3300 handle is likely if crude helps the Loonie this morning. However, a resistance around 1.3350 and then 1.3375 are good levels to see the USD/CAD in case the “risk on” mood in the fx capital markets fade away for whatever reason.