USD/CAD sinks to 3-week lows near 1.3370 ahead of OPEC

The buying interest around the Canadian dollar is rapidly picking up pace on Wednesday, sending USD/CAD to fresh 3-week lows in the 1.3375/70 band.

USD/CAD focus on OPEC, US data

The pair has come under renewed selling pressure following a strong pick up in the demand for CAD, all in response to the ongoing rally in crude oil prices.

In fact, rising optimism around a potential deal to limit the oil output at today’s OPEC meeting has lifted the barrel of West Texas Intermediate to multi-day tops beyond the $48.00 mark, gaining more than 7% for the day, supporting at the same time the sentiment around CAD.

Apart from the OPEC meeting, market participants should pay attention to US ADP report, ahead of Personal Income/Spending, inflation figures tracked by the PCE, the Chicago Fed PMI and Pending Home Sales, all preceding the Fed’s Beige Book. In addition, FOMC’s J.Powell (permanent voter, neutral) and Cleveland Fed L.Mester (voter, hawkish) are due to speak.

In Canada, GDP figures are expected to show the economy has expanded 0.1% inter-month during September and 3.4% on a yearly basis in the third quarter.

USD/CAD significant levels

As of writing the pair is retreating 0.48% at 1.3367 and a breach of 1.3311 (38.2% Fibo of the 2016 drop) would expose 1.3304 (55-day sma) and finally 1.3260 (low Nov.9). On the flip side, the next hurdle lines up at 1.3446 (20-day sma) followed by 1.3566 (high Nov.18) and then 1.3575 (50% Fibo of the 2016 drop).