It’s been a big session for WTI crude oil as bidders are dominating the action. March WTI futures are up nearly $1.10 on the day, with prices posting a high in the vicinity of $58.00. Typically, strong oil prices send the USD/CAD south; that hasn’t been the case today. The Loonie is holding in a tight consolidation pattern near 1.2750.
On the forex news front, there aren’t a whole lot of headlines to be had. The markets are relatively quiet as no primary market drivers were scheduled for today. However, Cleveland Fed President Loretta Mester has issued a few public comments. The key talking points reiterated the Fed’s current stance:
- COVID-19 vaccinations could boost recovery
- Economic performance is largely sectoral, with the recovery being uneven
- The Fed will remain accommodative
- A return to maximum employment is quite a ways off
All in all, this morning’s comments from Mester are more of the same from the Fed. Unlimited QE and dovish policy are the way forward ― barring a major uptick in economic activity, the Fed is going to remain dovish throughout 2021.
As we head deeper into Q1 2021, the fundamentals for the USD/CAD point to bearish price action. Let’s take a look at the daily technicals and see what this week may hold for the Loonie.
USD/CAD Firm After Friday’s Plunge
With only a few hours left in the forex session, the USD/CAD is holding firm. Rates are in a noncommittal area between the Daily SMA and Bollinger MP.
Here are the key levels to watch as we roll toward Tuesday’s session:
- Resistance(1): Daily SMA, 1.2765
- Resistance(2): 38% Current Wave, 1.2669
- Support(1): Bollinger MP, 1.2741
Overview: Right now, the Loonie is extremely quiet. However, be on the watch for a directional move from this pair later in the week. If price takes out the Bollinger MP in the next 24 hours, we could be in for a bearish breakout beneath 1.2700 ahead of Wednesday’s EIA crude oil inventories report.
Go to the news source: WTI Crude Rallies, USD/CAD Enters Consolidation