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USD/CAD – Starting to Top Out?
On the less noticed events last Friday was the surge in crude oil prices which ended the day at 45/bbl nearly 7 buck higher than the crisis lows it set earlier this week. While it may be premature to call the bottom in crude, for now at least the $40/bbl level appears to have become strong support and unless we have another deep swoon of risk aversion crude is likely to have stabilized.
That’s good news for the loonie which continued to get beaten up along with the rest of the commodity complex but may now find a bottom as well. USD/CAD has made a few forays into the 1.3300 figure but so far has failed to make any meaningful hold on the level. Up to now the rise in crude has not really helped the loonie rally as currency markets remain skeptical. But, if the rally hold, the loonie is likely to play catch up and could quickly drop towards the 1.3000 support setting a clear swing high at the 1.3300 level for now.