The big mover on today’s forex is the USD/CAD. With only a few hours left until Tuesday’s settlement, the Loonie is off more than 100 pips on the back of stronger WTI crude oil futures pricing. For the first time since last February, WTI has traded $50.00 ― is this an intermediate-term top or the beginning of a crude oil bull market?

This morning’s economic calendar was especially active facing the USD. Here’s a quick look at the key numbers:

Event                                                                    Actual                    Projected             Previous

Redbook Index (MoM, Jan. 1)                               0.5%                          NA                    0.4%

ISM-NY Business Conditions Index (Dec.)         61.3                            NA                    44.2

ISM Manufacturing PMI (Dec.)                             60.7                           56.6                   57.5

All in all, it appears that U.S. manufacturing is on the march. So, why the big drop in the USD vs the Canadian dollar? During the overnight, OPEC+ announced that it would hold production levels steady until the end of March. Essentially, this amounts to reduced output over the coming 60 days. Subsequently, WTI spiked and the USD/CAD tanked.

USD/CAD Turns South

The technical outlook for the USD/CAD is simple: the trend is down and a bearish bias is warranted.

Overview: For the time being, the USD/CAD is heavily correlated to crude oil pricing. Also, when considering the weak fundamentals facing the greenback, this market is poised to extend 2020’s losses for the near future.

To be honest, it’s difficult to find a support level worth trading for the Loonie. However, January 2018’s low is on the distant horizon at 1.2248. While this level is a ways off, it may be the only technical area worth taking a position long from until we see more out of 2021.