USD/CAD retraces losses as oil prices fall.
On paper it was a perfect day for USD/CAD shorts. US retail sales missed estimates and led to a broad selloff in the US dollar. Then the US oil inventory report showed a surprisingly large drawdown.
But after several spikes lower, USD/CAD is back to where it started US trading at 1.1970.The pair fell as low as 1.1929, the worst level January but completely retraced.
The main catalyst was oil. After touching $61.85 on the inventory data, the market had second thoughts. The EIA report was largely foreshadowed by API numbers and the IEA was out with a report talking about the oversupply in the petroleum market. Oil is now trading at a session low of $60.23, down 50-cents on the day.
Technically, the USD/CAD chart remains precarious. A third test of a level is usually as good as break. if it couldn't reject it after two tries, it probably won't.
That said, the oil outlook isn't quite as rosy and that continues to be the main CAD driver.
USDCAD clinging to support