Canadian Dollar Receives A Boost

Canadian Dollar Receives A Boost by Ashly Chole last updated on November 27, 2023

Canadian Dollar Receives A Boost From Crude Oil Rebound

If we look at the Canadian Dollar (CAD) weekly performance, it is in red with a big lead. However, the Canadian Dollar managed to register a small gain (+5 pips) on the last trading day of the week.

There was not much data from the Canadian side this week, which is the real reason why USD/CAD remained supported. For the next week, no big changes are expected as the economic calendar remains light.

Although the USD/CAD is in red for the week, it has jumped by 1.65% from its weekly lows. This demand for the Canadian Dollar (CAD) is mainly driven by the recovery in oil prices on better market sentiment.

Canadian Dollar Closes The Week Near 1.379

The USD/CAD started. the week by bouncing near the 1.3630 level, where the 50 SMA is located. Ever since then, the bears have retained control of the USD/CAD throughout the week.

In fact, the rebound witnessed in USD/CAD on Monday received rejection near the 1.3100 where the swing low from July was located.

That's why it is safe to say that the next target for the USD/CAD bulls is located near 1.3900 followed by 1.3950 and the 1.3975.

During Friday, the Crude Oil market received a little boost which was also seen in the Canadian Dollar as well. After the rebound in oil market, the Loonie managed to close the Friday's session with +5 pips. But, the highlight is that the pair managed to avoid closing the day in red.

For the next week, we have the US CPI due on Tuesday which means some major moves are expected in the USD/CAD. The analysts forecast that any sudden jump in the CPI will mean the Fed will further tighten the economy. The end result will be US Dollar positive but the same can't be said about the US economy.

On the contrary, a soft inflation reading means the Fed will have little reason to make any drastic changes to its interest rate policy.