CAD flexes muscles on OPEC+ shocker

Canadian dollar piggybacks on higher crude prices 

The Canadian dollar has posted gains in Thursday’s North American session. Currently, USD/CAD is trading at 1.2633, down 0.15% on the day. The Canadian dollar has shown sharp gains today, as investors have snapped up the currency following a surprise OPEC announcement which sent oil prices sharply higher. Canada is a major oil producer, and the significant boost in oil prices is excellent news for the Canadian economy. Earlier in the day, USD/CAD fell as low as 1.2557, its lowest level since February 25.

 

Oil prices jump as OPEC extends cuts

There has been a stunning development at the OPEC+ meeting, attended by OPEC members as well as Russia. OPEC+ announced that it would not hike output in April by 500 thousand barrels, but rather would keep output unchanged by extending the cuts that are currently in place. This means that OPEC+ will hold back some 9.2 million barrels from the market each day, until at least the beginning of May. This move caught the markets completely off guard, sending crude prices to their highest levels in 12 months. Currently, Brent crude has climbed to USD67.54 and WTI is trading at USD65.67.

In other news on the crude oil front, the EIA Crude Oil inventories report showed a record-high surplus of 21.6 million barrels. However, this figure was distorted by the recent Texas storm, which resulted in huge stockpiles due to refiners being unable to take on crude shipments. Prior to today’s EIA release, nine of the past 11 readings have shown drawdowns, and this trend could well continue as the global economy improves and the demand for oil increases.

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USD/CAD Technical

  • There is resistance at 1.2827. Above, we have resistance at 1.2921
  • On the downside, USD/CAD put strong pressure on support at 1.2553. This is followed by support at 1.2373

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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