The Canadian dollar has posted gains every day this week, as the pair continues to make steady inroads against the US dollar. USD/CAD is currently trading at 1.3203, down 0.33% on the day. In the North American session, the pair touched a low of 1.3192, its lowest level since January.
Low oil inventories boost the Canadian dollar
As the US and other economies show signs of recovery from the Covid-19 pandemic, demand for oil has increased. This has resulted in declines in US oil stockpiles for three straight months. On Wednesday, Crude Inventories declined by 4.5 million barrels. Higher demand has put upward pressure on oil prices, with WTI Crude rising 5.4% so far in August. WTI prices have almost fully recovered from the staggering losses in March of 55.6%. Higher oil prices are bullish for the Canadian dollar, as Canada is a major oil-producing country.
Manufacturing Sales Ahead
Canada will release the June data for Manufacturing Sales on Friday. After a plunge of 28.5% in April, the indicator rebounded with a gain of 10.7% in May. The forecast for June stands at 16.4%. If the release is within expectations, the Canadian dollar could respond with gains.
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USD/CAD Technical
USD/CAD moved slightly higher in the Asian session but then gave up these gains. The pair posted considerable losses in European trade but has steadied in North American trade.
- 1.3321 in the next resistance line. This is followed by resistance at 1.3393
- USD/CAD has tested 1.3204 in support. The next support line is 1.3159
- The 10-day MA line, which is at 1.3227, remains relevant