USD/CAD tests 1.32 as loonie presses higher

The Canadian dollar has posted gains every day this week, as the pair continues to make steady inroads against the US dollar. USD/CAD is currently trading at 1.3203, down 0.33% on the day. In the North American session, the pair touched a low of 1.3192, its lowest level since January.

Low oil inventories boost the Canadian dollar

As the US and other economies show signs of recovery from the Covid-19 pandemic, demand for oil has increased. This has resulted in declines in US oil stockpiles for three straight months. On Wednesday, Crude Inventories declined by 4.5 million barrels. Higher demand has put upward pressure on oil prices, with WTI Crude rising 5.4% so far in August. WTI prices have almost fully recovered from the staggering losses in March of 55.6%. Higher oil prices are bullish for the Canadian dollar, as Canada is a major oil-producing country.

Manufacturing Sales Ahead

Canada will release the June data for Manufacturing Sales on Friday. After a plunge of 28.5% in April, the indicator rebounded with a gain of 10.7% in May. The forecast for June stands at 16.4%. If the release is within expectations, the Canadian dollar could respond with gains.

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USD/CAD Technical

USD/CAD recorded slight losses in the Asian session but then reversed directions and posted gains. The pair has been flat in European trade

  • 1.3321 in the next resistance line. This is followed by resistance at 1.3393
  • USD/CAD has tested 1.3204 in support. The next support line is 1.3159
  • The 10-day MA line, which is at 1.3227, remains relevant

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.
Kenny Fisher

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