USD/CAD hits a high of 1.3198 for the first time since 10 September
It’s getting ugly for oil as WTI breaks below $60 and extends its fall sharply. At the same time, Brent is below $70 and dropping as well. WTI is down by almost 2% on the day now falling to $59.50.
In turn, this is weighing on the loonie and USD/CAD has jumped to a two-month high as a result. Price is now closing in on the 1.3200 handle but buyers will be aiming towards the September high @ 1.3226. Break above that and it opens up a move towards the July high @ 1.3290.
Buyers are in complete control in the pair now as almost everything is working against the loonie now. We have the Keystone XL pipeline being blocked by the courts. Risk is also shaping up to be negative on the day, weighing on commodity currencies/risk assets. And now oil prices are breaking key psychological levels to the downside.
For good measure, the dollar remains underpinned following the Fed statement overnight. This is setting up for a good platform for price to run higher in USD/CAD still in the session ahead.