USD/CAD bouncing back on higher oil-output on the cards

USD/CAD has made fresh highs at 1.3272 and has done so in a recovery of the previous days high 1.3313 and subsequent sell-off that ensued down to 1.3139.

Oil is rocking the markets at the moment with a score on the $52 handle yesterday, but only to meet supply that has taken the price of WTI to $50.74 lows recently that had been weighing on CAD, sending USD/CAD bid again in a better bid environment for the DXY. 

The price action is all being driven on global output expectations. Just as markets got the news that Russia will join in on the accord to curb production, producing nations such as Libya, Iran and Nigeria have all said they aim to pump additional volumes that could total 700,000 barrels of oil a day over August levels. This all leaves doubts as to whether the Organization of the Petroleum Exporting Countries (OPEC) can really achieve production cuts that had been agreed last month to end a crude glut that has decreased the price of oil and petroleum related products for the last two years. 

USD/CAD levels

"The steeper, rising trend channel that has developed in the past couple of months suggests the potential for the rally to re-accelerate in the next few weeks, explained analysts at Scotiabank, adding, "the USD rally is poised to extend. The one thing that is missing (from our perspective) is stronger evidence that the trend higher is deeply entrenched on the charts via bullish readings from the DMI oscillator. Across short, medium and longer-term time frames, the oscillator is flat, suggesting the USD rally will remain a grind, for now. Buy USD dips."

Meanwhile, current price is 1.3258, with resistance ahead at 1.3258 (Daily Classic R1), 1.3274 (Daily High), 1.3280 (Yesterday's High), 1.3298 (Monthly High) and 1.3298 (Weekly High). Next support to the downside can be found at 1.3227 (Weekly Classic PP), 1.3217 (Hourly 20 EMA), 1.3216 (Hourly 100 SMA), 1.3208 (Daily 200 SMA) and 1.3198 (Daily Classic PP).