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USD/CAD rises toward 1.28 as crude oil falters

  • Commodity-sensitive loonie weakens on falling crude oil prices.
  • DXY sticks to small daily gains a little below the 95 mark.
  • Ivey-PMI from Canada beats markets' estimates.

The USD/CAD pair, which traded trading sideways in a very tight range during the first half of the day, gained traction in the last hour and rose to a fresh daily high at 1.2783. As of writing, the pair was trading at 1.2780, adding 0.12% on the day.

Crude oil struggles to extend rally

The pair's recent upsurge seems to be driven by a fresh sell-off witnessed in crude oil, which impacts the demand for the commodity-linked CAD. After starting the day with a bullish gap and advancing to its highest level in nearly two years at $56.25, the barrel of West Texas Intermediate lost its traction and was last seen trading at $55.70, virtually unchanged on the day. In the meantime, Ivey Purchasing Managers Index in Canada advanced to 63.8 from 59.6 in October, helping the loonie limit its losses for the time being.

On the other hand, although the greenback struggled to persist its bullish momentum today following last Friday's rally, the US Dollar Index continues to float near the critical 95 handle despite fresh catalysts. News of New York Fed President William Dudley looking to resign in 2018 didn't have a negative impact on the index. At the moment, the DXY is up 0.05% on the day at 94.90.

  • With Dudley resigning chances of Trump’s Fed rise

Technical outlook

According to FXStreet's technical confluence indicator, the immediate resistance for the pair aligns at 1.2800 (10-DMA/Fibo 38.2% of 1-week range) ahead of 1.2915 (Oct. 27 high) and 1.3000 (psychological level). On the downside, supports align at 1.2700 (psychological level/20-DMA), 1.2620 (Oct. 24 low) and 1.2525 (100-DMA).

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