Following a correction to 1.3657
Following a correction to 1.3657, the USD/CAD pair reversed its course and fell to its lowest level since April 27 at 1.3589 as the US Dollar Index remained under pressure near the 98 handle. As of writing, the pair was trading at 1.3592, losing 41 pips, or 0.3%, on the day.
The commodity-linked loonie has been one of the best performing currencies since the start of the week amid solid gains seen in crude oil prices.
Following yesterday’s joint announcement by Saudi Arabia and Russia, which voiced the need for a nine-month extension to the output cut deal, both Iran and Kuwait on Tuesday showed their supports for an extension until March 2018. Although the barrel of West Texas Intermediate struggled to build on yesterday’s gains, it remains near the $49 handle.
- Iran likely to support 9-Month extension of supply cut pact if there is consensus – LiveSquawk
- Kuwait joins Saudis, Russia to seek oil cuts extension until March 2018 – BBG
On the other hand, the demand for the greenback continues to be hurt by the weak macro data. The US Dollar Index fell to its lowest level since Donald Trump’s election victory at 98.06 before retracing some of its losses. At the moment, the index is at 98.20, losing 0.62% on the day.
- US: Building permits in April were at 1,229,000, 2.5% below the revised March rate of 1,260,000
- US: Industrial production advanced 1.0 percent in April
The pair could encounter the first technical support at 1.3530 (Apr. 27 low) ahead of 1.3485 (50-DMA) and 1.3410 (Apr. 24 low). To the upside, resistances align at 1.3600 (psychological level), 1.3665 (20-DMA) and 1.3720 (May 15 high).