Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3690-1.3940
Euro 1.5960-1.6210
Sterling 1.8520-1.8770
WTI Oil (opening level) $91.30
The CAD/USD is opening at 1.3810 ( 0.7241 )
USD/CAD trades above 1.3800, hitting a fresh daily top around the 1.3820 close to the highest since April 13, touched on Friday, though bulls seem hesitant amid a combination of diverging forces.
Crude Oil prices plummet to over a two-week low amid renewed hopes for a US-Iran peace deal and reopening of the Strait of Hormuz, undermining the commodity-linked CAD and supporting the USD/CAD in its normal trading range.
The latest optimism exerts heavy downward pressure on the safe-haven USD and might keep a lid on any meaningful upside, warranting some caution before positioning for an extension of a three-week-old uptrend.
From a technical perspective, the USD/CAD pair keeps a constructive bullish bias above the 200-day Exponential Moving Average (EMA) and the 61.8% Fibonacci retracement of the March-May decline. Adding to this, a positive, rising Moving Average Convergence Divergence (MACD) histogram hints that upside momentum is strengthening. However, the Relative Strength Index (RSI) is approaching mildly overbought territory, holding back bulls from placing aggressive bets.
Hence, any subsequent move up is likely to confront immediate resistance at the 78.6% Fibo. retracement at 1.3877, with the recent swing high near 1.3965 as a stronger cap if buyers extend the move. On the downside, initial support sits in the 1.3807-1.3784 area, where the 61.8% retracement and the 200-day EMA cluster, followed by the 50% retracement around 1.3758, while deeper pullbacks would expose the 38.2% level at 1.3709 and the 23.6% retracement at 1.3648.