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The USD/CAD moved back above 1.2700 on Thursday as oil prices came under accelerating selling pressure.
BoC’s Gravelle spoke and largely stuck to the bank’s script after it held policy settings/guidance as expected on Wednesday.
USD/CAD has been on the front foot on Thursday, gaining about 0.4% to move back to the north of the 1.2700 level.
That marks a 0.8% turnaround from Wednesday’s lows close to 1.2600, though the pair still trades lower on the week by about 1.0%, having opened Monday trade to the north of the 1.2800 level.
Thursday’s upside means USD/CAD is back above its 21-day moving average and the pair is now probing an area of resistance around the 1.2810 mark.
The next level of upside resistance is around 1.2750. Beyond that, there is not much by way of technical barriers to stop the pair from retracing all of this week’s losses and returning to last Friday’s highs at 1.2850.
The main driver of upside in USD/CAD on Thursday has been a downturn in crude oil prices. WTI has been slipping in recent trade and is now down more than $2.0 on the day and under the $71.00 level.
Risk appetite has deteriorated broadly on Thursday, not especially due to any one headline or piece of news, but likely more due to profit-taking ahead of risk events such as US inflation data on Friday.
