The loonie started to gather strength against its competitors following the upsurge witnessed in crude oil prices, pushing the USD/CAD pair to a new session low around mid-1.35’s. As of writing, the pair was trading at 1.3554, down 0.14% on the day.
Following the EIA report, crude oil prices reversed course and recovered their recent losses, with the West Texas Intermediate breaking above the significant $50/barrel mark. At the moment, the barrel of WTI is up more than 1% on the day, at $50.06.
According to the Energy Information Administration, crude inventories fell by 3.6 million barrels in the week to April 21 (vs. 1.7 million barrels expectation). Despite an increase to 94.1% in the refinery operating capacity, both the gasoline and distillate fuel production decreased, further boosting the rise in crude oil prices.
On the other hand, the US Dollar Index has been moving sideways around the 99 handle as the investors await Trump’s new tax plan. Earlier in the session, U.S. Treasury Secretary Steven Mnuchin confirmed that the scheme would include a cut to 15% for businesses. The fact that the greenback remains resilient against its competitors ahead of the official announcement restricts the pair’s losses for the time being.
The pair could encounter the immediate support at 1.3500 (psychological level) ahead of 1.3460 (10-DMA) and 1.3390 (50-DMA). To the upside, resistances align at 1.3600 (psychological level/Dec. 28 high), 1.3625 (14-month/yesterday’s high) and 1.3700 (psychological level).