USD/CAD decline found support at 1.3600

The buying interest around the Canadian Dollar now seems to be taking a breather, prompting USD/CAD to leave the area of daily lows in the 1.3600 neighbourhood and retake the 1.3645/50 band.

USD/CAD sold off on WTI rally

Spot briefly tested fresh 3-week lows in the 1.3600 neighbourhood at the beginning of the week, although it has managed to gather some traction to the current 1.3660 region as the NA session is under way.

The ongoing rally in crude oil prices have lent extra legs to CAD, with the barrel of West Texas Intermediate gaining nearly 14% since early May’s low near $43.70 to today’s highs around $49.60

In addition, yields in the US money markets have plummeted in response to recent disappointing results in the US docket along with somewhat diminished expectations of a Fed’s move at the June meeting.

In the meantime, CAD remains under pressure from the positioning front, with speculative net shorts dropping to extreme levels during the week ended on May 9, according to the latest CFTC report.

In the data space, the NY Empire State index dropped to -1.00 for the current month, while the NAHB index has surprised to the upside for the same period.

USD/CAD significant levels

As of writing the pair is losing 0.46% at 1.3654 and a break below 1.3602 (low May 15) would open the door to 1.3575 (23.6% Fibo of the Apri-May rally) and finally 1.3528 (low Apr.25). On the flip side, the next up barrier is located at 1.3743 (high May 12) seconded by 1.3772 (high May 11) and then 1.3795 (2017 high May 5).