USD/CAD surged around 15 cents higher during the first half of March, as crude Oil crashed down, following the outbreak of coronavirus in Europe and the failure by OPEC+ to reach a deal in cutting production. The CAD is closely correlated to Oil prices, so the crash in crude Oil sent the CAD lower and USD/CAD surging higher.

The upside got some extra momentum from the surge in the USD during that time, but the surge ended by March 20 and the USD retreated back down. Crude Oil started turning bullish after US WTI crude fell below $0 at some point, which gave some life to the CAD.

USD/CAD has retreated lower, closing at $39 last Friday but it has retraced back up today during the Asian and European sessions. The price climbed above 1.40 for a short while, but it reversed back down below the 100 SMA (green). This moving averages have been working as support and resistance before, so we decided to open a sell forex signal below it, since it rejected the price decisively. So, we are short on this pair now, waiting for the trend to turn bearish.