USD/CAD remains under pressure even as it started the new week in the green. As a key commodity currency, the Canadian dollar is finding strength in the rising crude oil prices. At the time of writing, WTI futures were up by 0.05% at $69.41. Earlier in the session, it hit a high of $70, which is its highest level since October 2018. Despite OPEC+ gradually increasing production, analysts are of the opinion that oil demand will surpass its supply later in the year.
USD/CAD is also reacting to the declining Treasury yields and improved risk appetite. At 90.15, the dollar index is finding resistance at 90.20. This is after the 10-year US bond yields dropped from 1.61 earlier on Monday to the current 1.57.
USDCAD technical outlook
USD/CAD is up by 0.06% at 1.2089 after hitting an intraday low of 1.2071. On a two-hour chart, it is trading along the 25-day EMA and slightly above the 50-day EMA. Besides, with an RSI of 50, the outlook is rather neutral.
I expect USD/CAD to rise further to 1.2100, where it will experience resistance. If the market lacks enough buyers to push the price past that level, it will probably be range-bound in the near term. If that happens, the borders of the horizontal channel will be 1.2100 and 1.2070. A move above 1.2100 or below 1.2057 will invalidate this thesis.