USD/CAD: headed further south towards 1.2969?

Currently, USD/CAD is trading at 1.3054, down -1.09% on the day, having posted a daily high at 1.3200 and low at 1.3048.

WTI stronger, tests $44.80 post-EIA

WTI was choppy around the release of the crude oil inventories that rose +118K vs -2250K consensus. Gasoline inventories fell -894k. The moves were not massive as a result but USD/CAD has dropped on stronger oil with the 1.30 handle now under threat. From our standpoint, this positive reaction of the loonie is due to the concurrence of two separate actions," explained analysts at Swissquote Bank:

"First, the Canadian economy was able to surmount the massive oil correction that started in 2014 as oil producers improved efficiency, especially in the shale industry. Furthermore, the economy is back on track again and is close to its long-term average yearly growth rate of between 3% and 4%."

USD/CAD levels

USD/CAD cleared 1.3100 testing fresh multi-month lows at levels last seen in late February. "Momentum signals are bearish, and the RSI has pushed below 30. There are no major support levels ahead of 1.3000 and the Jan 31 low at 1.2969. The Jan 31 low coincides with the 61.8% retracement of the May 2016-May 2017 rally," explained analysts at Scotiabank. To the upside on a reversal, the main level to breach is 1.3390.