Crude oil higher may be helping loonie.
The USDCAD is trading to a new session low as the market may be reacting to the higher oil prices finally. The price also stalled near a swing high yesterday which gave buyers cause for pause.
Looking at the hourly chart, the high price from yesterday tested the high price going back to May 13 near 1.2202. Sellers leaned against that level and pushed the price back below another swing high going back to May 7 at 1.21927.
Today, the price high stall ahead of that level I.21912. The inability to get above that level – and take a run at 1.2202 – turned buyers to sellers. The pair is also running away from the 1.2178 level which is the 50% midpoint of the range since May 4. The last hourly bar stalled the high right near that level.
Going forward, getting back above that midpoint at 1.21785 would be a more bullish play by traders, with the 1.2202 double top also a key hurdle to get to and through on a more bullish dollar run post FOMC. Move above those levels and the door remains open for further upside momentum.
On the downside, the rising 100 hour moving average comes in at 1.21458. A move below that level, and the swing area between 1.2132 and 1.2145 would be targeted (see green numbered circles). Move back below that area, and the price reenters into the up and down swing area that confined the pair for most of the time period starting on May 7.
Crude oil prices may also be nudging the CAD higher as well. The price nearly reached $73 ($72.99 is the high). The current price is at $72.62 up $0.50 or 0.69%. The price is trading at the highest level since October 2018.