The USDCAD is trading lower on the day after Reuters reported that the OPEC + alliance had decided to roll over the current production quotas over to April. Also, the report says Saudi Arabia is considering extending its voluntary production cut of 1 million barrels per day to May.
This report caused crude oil prices to jump to 13-month highs, resulting in the slump in the USDCAD seen earlier in the session. However, the pair has clawed back some of those losses on the comments by Fed Chair Jerome Powell, which have caused bond yields and the USD to tick higher. Presently, sentiment on the pair is being dominated by the outcome of the OPEC + meeting than by the bullish effect on the greenback from rising bond yields, leading to the 0.23% drop in the USDCAD as of the time of writing.
Technical Outlook for USDCAD
The 1.25862 support level is under threat, as the daily candle has violated this level to the downside. Bears would need a convincing close below this level (3% penetration close below the support) to confirm the breakdown of this level. This level then allows 1.25323 to enter the picture as a new target, with 1.24489 also serving as an additional target to the south. Only a breach of the 1.24489 support allows the downtrend on the pair to continue.
On the other hand, a bounce of the daily candle on this support, reinforced by the channel’s trendline, allows the USDCAD to retest the 1.26219 resistance. Above this level, 1.26647 serves as additional resistance. 1.27315 is another barrier to the north, after which short-term sentiment on the USDCAD could turn bullish.
USDCAD Daily Chart