USD/CAD: claiming back 50% of the 2016 sell-off to 1.2460

Currently, USD/CAD is trading at 1.3491, down -0.02% on the day, having posted a daily high at 1.3498 and low at 1.3486 after rallying by 0.54% overnight. 

Just a reason or two to short the 'March rate hike herd'

USD/CAD skyrocketed today with a number of driving forces behind the move, namely oil and the US dollar in the back of the various catalytical reports. The first was the ADP report as a positive prelude for this Thursday's nonfarm payrolls report in the US Friday session. The market is looking to that event as the last resort in respect of the FOMC next week and the potential for a rate hike. 

Solid U.S. data and GDP tracker update - Nomura

Then it was the EIA data showed a strong build in inventories in the US. That initiated a sell-off in oil that leads to the subsequent triggering of stops below key technical levels. WTI tumbled by 5%. 

"Supplies climbed 8.21 million barrels to 528.4 million barrels. This followed on from comments from Saudi Arabia’s Energy Minister, who said global crude oil stockpiles are draining slower than expected. US crude oil production was also higher, hitting 9.09mb/d. When combined with the huge speculative long positions in the market, it’s not surprising that prices sold off so strongly," explained analysts at ANZ. 

Oil prices fell heavily after EIA - ANZ

USD/CAD levels

USD/CAD is now in territory not seen since in early January. The technical outlook is broadly bullish with RSI at DMI’s, and an ADX all reading bullishly.  The next stops are 1.3500, 1.3587 13th Nov high and a break through the double top at the same level. Space on the 1.36 handle puts the pair through a 50% retracement of the 1.4689 highs seen 19th Jan from lows of 1.2460 of the April 26th 2016.