The Loonie surged exultantly on the first day of the week, its ascent catalyzed by pervasive feebleness of the U.S. greenback within currency corridors, and more crucially, by augmented crude oil valuations during the trading session – a prime export for Canada’s financial system. WTI and Brent escalated in excess of 5% post the unanticipated proclamation of a manufacturing curtailment by OPEC+ with the intention of stabilizing the mercurial energy markets of late.
As OPEC+ resolves to diminish production from May onward, it will constrict global provisions in forthcoming months, fortifying petroleum rates and establishing a bedrock for the commodity in case the worldwide economic panorama deteriorates significantly. This development is poised to buttress the Loonie, contingent on sentiment recuperating further and fluctuations being held in check.
Amidst such circumstances, USD/CAD plunged in excess of 0.6% upon the week’s commencement, shattering the symbolic 1.3500 threshold and plummeting toward the trendline support at 1.3420, situated marginally above the 200-day elementary moving average – a demarcation line for ursine and taurine market participants. The price response within this vicinity may unveil crucial technical insights regarding the outlook, with a collapse unmasking 1.3370, succeeded by 1.3220.
Although the pessimistic trajectory appears more plausible currently, an optimistic resurgence cannot be entirely disregarded. That being said, should USD/CAD falter in rupturing the 1.3420-1.3400 foundation and effectively bounce off this locale, purchasing fervor could intensify, paving the path for an advance toward the 1.3500 mark. With additional momentum, attention veers toward the 50-day elementary moving average.