The Loonie seems to rally lately when there is no local data and when the global equity market is in a rally mode. This is precisely what is happening right now. However, the Loonie did not rally yesterday despite all other major currencies, such as the Euro and Aussie dollar, rallied against the Greenback. This morning though, the USD/CAD fell (Loonie rallied) around 0.60 percent after crude oil reached almost USD 60 a barrel following the commitment by OPEC and its partners to continuing production cuts until at least June.
The improvement of the "risk on" environment did not stop there; China could triple its purchases of US agricultural products in two to five years, said Secretary of Agriculture, Sonny Perdue. China offered some desirable numbers as part of the trade negotiations, although there are still concerns in areas such as biotechnology. China has already made some good faith purchases of soy after declaring a trade truce in December.
Technically speaking, the USD/CAD broke an intraday support around the 1.3300 handle, and if the bullish environment continues in the markets, it might test the 1.3200 handle. If this happens, there is a risk that the uptrend seen since September 2017 is broken, despite that the perception of Canadian fundamentals is deteriorating.