USD/CAD tried a break of the 200-day moving average last week but wasn’t ready for the break.
Today, a sharp seller order hit the pair ahead of the options expiry, knocking it down to 1.0286. There were no big expiration so the move was more-likely flow released. In any case, it was another push to the downside that was quickly picked up by the USD/CAD buyers.
The main issue for CAD right now is oil. US crude is near a 5-week low and Canadian oil is trading at a whopping $30 discount to WTI — the widest spread since February.
Western Canada select spread to WTI crude
As the Northern US continues to ramp up production, pipeline applications sit in limbo and Canadian refining capacity at zilch, the massive discount is only going to get worse.