2017 has ended and 2018 has begun but the trend of the last days of last year continue into the new year. The dollar is weak and oil prices are looking perky. These trends help the Canadian dollar, but another push is missing to bring USD/CAD over the edge of 1.25, or 0.80 in CAD/USD.
WTI crude oil reached another cycle high of $60.71 and is getting comfortable with the $60 handle. The post-crash high of 2015 was $62, and we are not there yet. While the price of petrol received a push from Iran’s issues, it wasn’t enough. Not yet.
Iran has seen the sixth day of demonstrations which saw violent clashes and dozens dead. The oil-exporting nation is suffering from a high unemployment rate among the young and rising prices. The anger got out of control and the regime has used stronger means to quell the unrest. Some fear it could slow oil output.
Canada, another oil exporter, is suffering from extremely cold weather, but its currency is steaming hot thanks to higher oil prices. Yet as aforementioned, it was enough only to touch 1.25 on Dollar/CAD, not more so far.
If the line crumbles, the next cushion is at 1.2435, a line of support from October. This is followed by 1.2335 and 1.22, as the chart shows. Resistance is 1.2630.
More: USD/CAD at low support following the Libyan pipeline blast