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Has Canadian Dollar Strength Come to an End?


The monthly spot dollar chart shows an average percent gain of .4% over the past five years and 1.2% over the past 10 years, while gaining strength in April in eight of the past 10 years.

This move coincides with a seasonal move in crude oil prices, as demand ramps up ahead of the summer driving season. At the same time, the May NYMEX crude oil chart shows a $31.79/barrel increase from the contract’s November low to March high and has since shown three consecutive lower closes on the weekly chart. A further surge in spring crude prices may be in jeopardy given uncertainty in global markets.

The attached chart shows current trade holding above the trendline drawn from its March 2020 low, with support seen at $.7893 CAD/USD. A breach of the four-week low may be needed to signal a change in trend, with a range of support seen from the $.7855 to $.7878 range, weekly lows seen since mid-February.

The histogram on the lower study shows noncommercial traders paring their bearish net-long futures position over the past two weeks to 10,263 contracts as of March 15, which is slightly below the four-week average.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @Cliff Jamieson



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