USD/CAD stabilizing on 1hr sticks ahead of key support at 1.3040

Currently, USD/CAD is trading at 1.3065, down -0.74% on the day, having posted a daily high at 1.3170 and low at 1.3061.

USD/CAD has been falling in a steady decline while oil has been making some tracks to the upside, albeit currently being squeezed to the downside and headed toward the 55 1hr sma at 55.21. CAD is stabilizing on the 1hr sticks, but remains fragile ahead of the 1.3040 support region.  

"We remain CAD bears on the basis of relative central bank policy and note the potential for jawboning from BoC Gov. Poloz at his upcoming speaking engagement on Tuesday. Poloz recently spent a good deal of time addressing his concern relating to the broad rise in CAD, its relationship to the broader USD, and the need for reconsideration in light of growth and policy divergence between Canada and the U.S.," explained analysts at Scotiabank, noting that there are no domestic releases scheduled ahead of the Jan 31 GDP data, leaving the near-term focus on the broader market tone and its impact on yields and spreads.

The weekly EIA report ws bearish yet WTI rallied

WTI jumps to daily highs post-EIA, above $53.00

Meanwhile, we had a rise in inventories and production and gasoline futures dropped while WTI crude actually rallied to $53.43 from $52.80 in the back of the EIA report. Crude inventories rose 2840K compared to 2500K - there may have been some errors on the gasoline report with the 6796K freakish jump, leading to a rally in oil.

USD/CAD levels

Current price is 1.3066, with resistance ahead at 1.3078 (Daily Classic S1), 1.3100 (Weekly Classic S1), 1.3106 (Yesterday's Low), 1.3116 (Daily 200 SMA) and 1.3126 (Hourly 20 EMA). Next support to the downside can be found at 1.3061 (Daily Low), 1.3059 (YTD Low), 1.3059 (Monthly Low), 1.2995 (Daily Classic S2) and 1.2883 (Daily Classic S3).