USD/CAD attack 20-EMA at 1.2570 on weak oil prices

• USD/CAD is facing resistance near the 20-EMA and the trendline place from 1.2007.
• Falling oil prices have weakened the loonie.
• The Unemployment Rate of Canada will be a major event this week.

The USD/CAD pair has rebounded sharply after sensing a firmer responsive buying to near the round level support of 1.2400. The pair has witnessed a strong upside amid broader weakness in oil prices. The oil prices have been in the grip of bears after US President Joe Biden announced an additional release of 180 million barrels in six months from the Special Petroleum Reserve (SPR). Investors should be aware of the fact that Canada is a leading exporter of oil to the US and a plunge in the oil prices impact the loonie significantly.

Also, the hawkish comments from the Federal Reserve (Fed) policymakers in a while have brought a broader strength to the mighty greenback. The minutes from the Federal Open Market Committee (FOMC) of March on Wednesday have indicated one or more 50 basis points (bps) interest rate hikes this year. Therefore, two out of seven rate hikes promised by Fed Chair Jerome Powell may be an elevation of half a percent.

Going forward, the release of the Unemployment Rate by Statistics Canada will have a significant impact on the asset, which is due on Friday. A preliminary estimate for the jobless rate is 5.4% against the previous print of 5.5%.

USD/CAD Technical Analysis

On a daily scale, greenback bulls are attacking the 20-period Exponential Moving Average (EMA) at 1.2574. However, the trendline placed from June 2021 low at 1.2007 will continue to act as a major barricade for the asset.

USD/CAD daily chart