USD/CAD drops to lows near 1.3460

The offered tone in the greenback at the beginning of the week is prompting USD/CAD to test the lower bound of the range in the 1.3470/65 band.

USD/CAD attention to oil, Fischer

Spot has abandoned the area of recent tops near 1.3570, shedding around a cent amidst renewed selling pressure around the buck and a better tone in crude oil prices, which in turn gave extra legs to CAD.

In fact, the barrel of West Texas Intermediate is trading on a firm fashion on Monday and extending the upside to the $47.00 neighbourhood, as speculations on a deal to limit the oil output at the OPEC meeting in Vienna remain on the rise while driller Baker Hughes reported US oil rigs count increased by 19 to 471 during last week.

On the data front, Fed’s Vice Chair S.Fischer (permanent voter, hawkish) is due to speak on ‘Longer-term Challenges for the US Economy’, while September’s Wholesale Sales are only due in Canada.

From the positioning perspective, speculators have barely moved from the net short territory, keeping levels in the area of multi-week highs during the week ended on November 15, according to the latest CFTC report.

USD/CAD significant levels

As of writing the pair is retreating 0.30% at 1.3464 and a break below 1.3401 (low Nov.15) would aim for 1.3311 (38.2% Fibo of the 2016 drop) and then 1.3260 (low Nov.9). On the flip side, the immediate hurdle lines up at 1.3566 (high Nov.18) followed by 1.3575 (50% Fibo of the 2016 drop) and finally 1.3590 (high Nov.14).