Oil Hit Resistance and the USD/CAD Found Support,The Value of the USD/CAD is Being Driven by Oil

We saw the USD/CAD get a nice bounce off of support at 1.1800 today as the price of oil dropped from around $50 per barrel to below $43 per barrel.

The drop in oil prices came on the news that the U.S. reserves were larger than anticipated—which means demand for oil in the near term will most likely be lower. Since demand is going to be lower, the price of oil dropped.

Canada is a leading oil supplier to the United States, and lately we have seen that the Canadian dollar (CAD) has been closely tied to the price of oil.

I don't see the price of oil breaking up above $50 per barrel any time in the near future, which means that the USD/CAD should be able to hold the support level it has established at 1.1800.

by S. Wade Hansen