The Canadian dollar is looking for the bottom of the barrel, and so are oil prices.
USD/CAD is reaching out to new highs, with 1.3618 being the peak at the time of writing.
Since OPEC members failed to agree on enforceable quotas, or any real production cut, the price of the black gold has been deteriorating.
The move accelerated on Monday and is gaining further traction today. WTI Crude battled with the August low of $37.73 for some time before heading down and losing also $37, hitting a low of $36.78 so far.
Brent Crude is following along challenging the $40 level, but at $40.13 currently, this round level could break also on this indicator.
For Canada, an exporter of oil, this isn’t good news and USD/CAD is on the rise. It had already had 3 reasons to rise, and the primary one, oil prices, is now leading the charge.
These are new 11 years highs (the lowest for the loonie since 2004). After breaking resistance at 1.3460, the sky seems to be the limit. It is hard to find resistance lines on the road above, perhaps only the round number of 1.40, and only because it is round.
Better than expected housing starts in Canada: 212K instead of 200K and better than the previous figure of 198K didn’t really help out. Also Canadian building permits for October did not help: these rose 9.1%, beating predictions for 3%. Yet Canadian housing just cannot counter oil prices for the C$.
Here is how USD/CAD looks on the chart, certainly a clear direcion:
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