USD/CAD breaks below 1.3500, fresh daily lows

The Canadian Dollar is now picking up further pace vs. its American neighbour, dragging USD/CAD to fresh 4-week lows in sub-1.3500 levels.

USD/CAD attention to Fedspeak

Spot came under renewed selling pressure on Monday following the rally in crude oil prices and the continuation of the offered bias around the greenback.

In fact, the barrel of the West Texas Intermediate is trading in fresh 5-week tops above the $51.00 mark, always on the back of increasing bets on an extension of the OPEC output cut deal, likely to be defined at the cartel’s meeting on Thursday.

In addition, the US Dollar Index has tumbled to fresh lows in levels last seen back in November in the vicinity of 96.80, as market participants reacted adversely to comments by German Chancellor A.Merkel on (according to her opinion) a weaker euro.

In the US data space, the Chicago Fed National Activity Index is due later seconded by speeches by FOMC’s L.Brainard (permanent voter, centist), Philly Fed P.Harker (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish), all ahead of Wednesday’s BoC meeting and FOMC minutes.

From the speculative community, CAD net shorts have increased to extreme levels around 98K contracts during the week ended on May 16 as shown by the latest CFTC report.

USD/CAD significant levels

As of writing the pair is losing 0.04% at 1.3506 and a break below 1.3485 (low May 22) would open the door to 1.3481 (55-day sma) and finally 1.3440 (61.8% Fibo of the April-May rally). On the flip side, the next up barrier is located at 1.3541 (high May 22) seconded by 1.3575 (38.2% Fibo of the April-May rally) and then 1.3646 (20-day sma).