The Loonie had a rally yesterday after two days of falling. The USD/CAD closed lower at the 1.3400 handle (stronger Loonie), and continued its rally in the Asian and European session, testing the lowest intraday level of 1.3380. The Loonie was helped by crude oil, which has rebounded. Spiraling tensions in Venezuela exposed further curtailment of crude oil supplies of large producers. Despite that, the significant expected US exports don’t provide a positive outlook for crude oil. On that note, oil trader Paul Vega, who heads the office of global commodities trader Trafigura Group, said that there is more crude oil being moved than America’s refineries can consume, and the primary way to go for trading houses like his is exporting it.
The crude oil WTI crossed the 60 dollars a barrel handle for few minutes and came back down (below 60) this morning. This is despite the fact that the important crude oil market participants know that the flow of crude might continue growing over the next few years, and that OPEC might face challenges such as keeping oil prices at soaring levels. And, let's not forget that Trump is a potent weapon against crude oil prices staying high.
Technically speaking, the USD/CAD rate is not able to make higher highs in the daily chart (stronger Loonie). The last top was at 1.3467 on March 7th, but the previous high seen yesterday was 1.3444. This situation is telling us that the USD/CAD pair is probably running out of gas to the upside for now. Critical support and resistance levels for today are 1.3340 and 1.3443 respectively.