FxWirePro: Support around 1.32 would decide fate of USD/CAD over the medium term

The Canadian dollar, despite the headwinds coming from the North Atlantic Free Trade Agreement (NAFTA) renegotiations with the United States, has strengthened from as low as 1.38 per dollar to 1.343 per dollar as of today. The majority of the gains came in the past two weeks fuelled by higher oil price and expectations that an agreement between the OPEC and participating N-OPEC countries would push oil price higher. In the past two weeks, the oil price has increased by almost 18 percent.

While the natural expectation is for the Loonie (Canadian dollar) to strengthen further against the dollar after the OPEC concludes its meeting around 15:00 GMT, the real test would be around 1.32 area. If the Canadian dollar breaks beyond that level it would negate the short-term negative outlook.

The weakness in the dollar has also contributed to the decline of the USD/CAD pair. The recent dovish or toned down hawkish talks from sizable numbers of FOMC policymakers are also likely to weigh on the dollar.