Canadian Dollar, Crude Oil May Fall as Australian Dollar Gains at Open
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Canadian Dollar, USD/CAD, Crude Oil, Australian Dollar, OPEC, Virus – Asia Pacific Market Open
- Canadian Dollar may fall alongside crude oil prices as week gets going
- OPEC+ virtual meeting was pushed back for now on Saudi-Russia row
- Weekend stock futures rise on virus updates, Australian Dollar may gain
Canadian Dollar, Crude Oil May Fall as Australian Dollar Gains at Market Open
The Canadian Dollar may fall with crude oil as the Australian Dollar gains at market open. Over the weekend, the OPEC+ virtual meeting originally plannedon Monday was pushed back to later this week. This followed a row between key producers Saudi Arabia and Russia as they exchanged verbal jabs. The former said that comments by the latter blaming it for the end of the OPEC+ pact were “fully devoid of truth”.
The dive in crude oil prices – in response to the coronavirus outbreak sinking global travel – was amplified by a price war initiated by Saudi Arabia and Russia. Last week, the commodity surged to deliver its best 5 days since at least 1983 on hopes of major output cuts to help alleviate a supply glut. However, it is unclear so far if other major oil producers – notably the US – could join in as confusion around output cuts fuels price volatility.
Further complicating matters are threats from President Donald Trump who over the weekend hinted at using tariffs “if needed” to protect the oil industry. Meanwhile weekend futures tracking Wall Street – courtesy of IG - were pointing higher into Monday’s Asia Pacific session. That could precede a cautiously optimistic tone at the onset of the new week. This may bode well for the growth-oriented Australian Dollar.
On Sunday, New York State – the epicenter of the coronavirus outbreak in the United States – reported its first drop in coronavirus deaths. Meanwhile across the Atlantic, Italy and France also reported ebbing fatalities from the virus. This fueled case stabilization bets. Gains in equities may also help alleviate weakness in sentiment-linked crude oil. Follow-through is uncertain however given the fluid nature of COVID-19.
Canadian Dollar Technical Analysis
Given upside pressure, USD/CAD could be testing key falling resistance from the March peak on the 4-hour chart below - blue lines. With confirmation, a breakout could precede a reversal of the near-term downtrend as prices challenge 1.4349. Taking out this area may open the door to revisiting peaks from 2016. Otherwise a drop through rising support from March 27 – pink lines – may refocus the objective to the downside.
USD/CAD 4-Hour Chart
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.