USD/CAD struggles to justify oil rally amid Ukrainian and Libyan risks
- USD/CAD remains stable after a two-day rebound from the five-week low.
- WTI Crude Oil Rebounds to 14-Year High as Ukraine-Russia Troubles Escalate, Venezuela, U.S. Discuss Production Deal and Libya Witnesses Shutdown 2 fields.
- DXY applauds safe-haven demand, the hawkish Fed, as well as the strong US jobs report.
- Canadian employment numbers and oil headlines will be crucial for near-term guidance.
USD/CAD bears are attacking the 1.2700 level while refreshing the intraday low early Monday morning in Europe. In doing so, the loonie is struggling to portray the risky market mood as high prices for Canada’s main export, WTI crude oil, battle the strengthening US dollar index (DXY ).
That said, WTI Crude Oil hit the highest levels since late 2004 while breaking through $125.00 earlier in Asia, up 7.0% near $121.40 at the time of the press. The black gold has recently encouraged growing fears of a supply crisis as OPEC+ refrains from taking further steps to overcome Russia-related woes. On the same line could be headlines suggesting a halt in production at Libya’s two oil fields due to an armed attack, which in turn caused an estimated 330,000 barrels of lost production, according to VOA News.
Elsewhere, the US Dollar Index (DXY) broke through the 99.00 level to refresh the 22-month high before falling back to 98.93, up 0.45% on the day at press time. .
The upside moves in the greenback gauge also take inspiration from the recently firmer US jobs report for February and hawkish comments from Chicago Fed President and FOMC member Charles Evans, in addition to nervousness between Ukraine and Russia.
It should be noted that the United States, Denmark, Canada and the United Kingdom are discussing a ban on Russian oil imports and may prefer the Middle East route for energy supplies, which highlights recent talks with Venezuela and Iran testing oil buyers.
Elsewhere, upbeat China trade data for February is also helping oil prices and keeping USD/CAD hopeful.
Amid these games, S&P 500 futures fell 1.30% while 10-year US Treasury yields fell 2.5 basis points (bps) to 1.69% to portray the high risk mood.
Looking ahead, monthly Canadian jobs numbers and the US Consumer Price Index (CPI) for February may entertain USD/CAD traders, but close attention will be paid to risk catalysts for guidance. clear.
USD/CAD dampens the rebound in the 100-day EMA around 1.2665 at press time, below a two-month-old resistance line near 1.2775. Given the bearish MACD and generally stable RSI, sellers are likely to return.