Oil price surge swamps USDCAD Oil price surge swamps USDCAD Oil price surge swamps USDCAD

Oil price surge swamps USDCAD

Commodities 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  The Canadian dollar soared in tandem with WTI crude oil prices following the release of today's EIA inventories data.


USDCAD collapsed from 1.3360 at the New York open to 1.3313 as of 14:15 GMT coinciding with a surge in WTI oil prices to $58.05/barrel from an overnight low of $57.04/b. The rally was fueled by a surprise decline in weekly crude oil stocks as reported by API yesterday and again this morning by the Energy Information Administration report showing Weekly Crude Stocks declining 3.86 million barrels. 

Shrinking inventories combined with global production declines and somewhat positive developments in the US/China trade talks are underpinning prices.

The USDCAD uptrend since October is intact while prices are above 1.3150 but prices are in correction mode today. The post- March 5 rally following the dovish Bank of Canada policy statement and outlook ran out of gas at 1.3465, making triple-top resistance. The subsequent retreat below support at 1.3380 and again at 1.3350 targets the 100-day moving average at 1.3290.

US dollar losses were not just confined to the Canadian dollar. The greenback is modestly lower against the major G10 currencies except for the Japanese yen and New Zealand dollar, which are unchanged after today’s US economic data improved risk sentiment.

Durable Goods Orders rose 0.4% in January, well above the -0.5% forecast, making the third consecutive gain for this data point. Construction spending was better than expected, rising 1.3% compared to 0.4% forecast and Producer Prices were a tad lower than estimated. Together, the data alleviates recession concerns while not giving any ammunition for higher interest rates.
Source: US Census Bureau
Wall Street liked the data and opened higher. The Dow Jones Industrial Average rose 0.48% as of 14:15 GMT, supported by a bounce in Boeing Corporation (BA: NYSE) shares. Prices are 0.52% higher but at $377.13, BA stock is well below Friday’s close of $422.50.
USDCAD (four-hour, source: Saxo Bank)
Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.