USD/CAD at highest levels since Jan 2016, 1.3778 the high so far

Currently, USD/CAD is trading at 1.3765, up 0.26% on the day, having posted a daily high at 1.3777 and low at 1.3698.

USD/CAD is up and away with WTI dropping like a barrel full of lead in the middle eastern seas after a series of events this week have opened the taps wider in respect to the April's supply zone from $53.50bbls area. Here is a link to the details: Oil intermarket: DXY and oil highly correlated, can WTI thus bounce back?

Meanwhile, CAD is making fresh lows despite a weaker DXY, (US Dollar approaches multi-month lows below 99), today below the 99 handle again and printing a low of 98.77 so far. The more compelling argument though for higher USD/CAD comes with the divergence between the Central Banks and market participants have firmed expectations of a June Fed hike (98% probability) on the back of the data yesterday and indeed the FOMC outcome.

We now expect to hear from BoC Gov. Poloz during his public appearance in Mexico City (text 16:10 ET, speech 16:25 ET), speaking on the topic of ‘Canada and Mexico: Common Issues in Uncommon Times’. "The appearance is likely to provide clarity on the ‘significant uncertainties’ highlighted in recent policy statements and may force a more cautious tone," explained analysts at Scotiabank. 

USD/CAD levels

Scotiabank analysts explained that USD/CAD's short-term technicals are bullish. "DMI’s are bullishly aligned, ADX trend strength is firming, and we continue to highlight the absence of any meaningful resistance ahead of the next major Fibo retracement level at 1.3839. Near-term support is expected between 1.3680 and 1.3700. We remain USDCAD bulls (CAD bears) with a Q2 target of 1.40."