The USD/CAD has been bearish for more than a year, since crude oil started recuperating from the crash in April last year. The weakness of the USD has helped sellers as well, who have pushed this pair more than 26 cents down, to 1.20, although the big round number at 1.20 held as support twice, and it seems like the trend might be reversing now. Crude oil is pretty bullish, holding well above $70.

But, the CAD is not taking advantage of this, which is a bearish sign for the CAD and a bullish sign for the USD/CAD. The Bank of Canada (BOC) left rates unchanged just a while ago, and they didn’t seem to be thinking about turning hawkish anytime soon, despite the economy picking up, which should weigh on the CAD. So, this might be the beginning of a trend reversal for this pair. Below are the comments from the BOC:

The area above 1.20 held as support and now lows are getting higher in USD/CAD

Bank of Canada Decision Highlights June 9, 2021

• Overnight rate left unchanged at 0.25%, as expected
• Monthly asset purchases at $3B vs $3B prior
• Economic developments have been broadly in line with the outlook in the April Monetary Policy Report
• BOC maintains forward guidance on the path for the overnight rate
• Says global economic activity is picking up
• Notes that commodity prices have risen further, notably oil, and the Canadian dollar has seen a further appreciation
• Q1 GDP was below the BOC forecast but “underlying details indicate rising confidence and resilient demand”
• CPI inflation is likely to remain near 3% through the summer; it is expected to ease later in the year, as base-year effects diminish and excess capacity continues to exert downward pressure

USD/CAD Live Chart