The USD/CAD Crashes As WTI Holds Above $65.00

CME WTI crude oil futures are holding the line at $65.00. Let’s dig into the USD/CAD technicals and see where this market stands.

Written by: Shain Vernier • Thursday, May 6, 2021 • 2 min read

• Last updated: Thursday, May 6, 2021

The Greenback is getting pummeled by the Loonie as WTI crude oil prices hold above $65.00. With only about four hours left in the U.S. session, the USD/CAD is off 75 pips (-0.61%) and headed lower. At this point, it appears that a hard test of 2017’s lows is inevitable.

On the economic news front, the weekly U.S. jobless claims numbers are out. These figures aren’t as important as they once were, but are still grabbing headlines. Here’s a look at today’s data:

Event Actual Projected Previous

Initial Jobless Claims 498K 540K 590K

Continuing Jobless Claims 3.69M 3.620M 3.653M

Jobless Claims 4-Week Average 560K NA 621K

The key takeaway from this group of figures is the Jobless Claims 4-week average. Jobless claims have been on a steady decline through the first half of 2021; April’s performance certainly reinforces confidence in the COVID-19 labor recovery.

At press time, CME WTI crude oil futures are holding the line at $65.00. Let’s dig into the USD/CAD technicals and see where this market stands.

USD/CAD Falls To Multi-Year Lows

In a Live Market Update from earlier this week, I outlined a buying opportunity in the USD/CAD. The trade produced 30 pips before being washed out to the bear. At this point, one has to wonder where the bottom is for the Loonie.

USD/CAD

Overview: For the time being, the key number on my radar for the USD/CAD is 2017’s low, 1.2061. If we see WTI crude oil continue to rise in May, and I think we will, then a test of this level is a foregone conclusion. If the USD/CAD is going to bottom out, it should occur between 1.2061 and 1.2000. If bidders don’t step up to the plate in this area, then it’s anyone’s guess how low the Loonie can go.

BUY USD/CAD

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ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.