USD/CAD extends weekly losses towards1.2400 on firmer oil, ignore’s BOC’s Mecklem

• USD/CAD remains pressured for the consecutive fourth day, nears intraday low of late.
• WTI jumps to fresh one-week high amid softer USD post API draw.
• BOC’s Mecklem refrained from monetary policy clues after previously citing inflation fears.
• US inflation, WTI EIA stockpiles and Canada Leading Indicators eyed for fresh impulse.

USD/CAD stays depressed around 1.2430, recently sidelined during the four-day downtrend on early Wednesday. In doing so, the Loonie pair cheers the upbeat performance of Canada’s key export item, i.e. WTI crude oil, while paying a little heed from the latest comments of Bank of Canada (BOC) Governor Tiff Mecklem.

WTI crude oil prices take bids around $83.50, the highest level in a week. The black gold recently cheered upbeat oil stocks change figures from the American Petroleum Institute (API). Also favoring the bulls were comments from the White House and softer US dollar.

Read: WTI refreshes weekly high past $83.00 on API oil inventory draw, EIA data in focus

That said, the US Dollar Index (DXY) dropped for three consecutive days in the last, indecisive around 93.95 of late. The greenback gauge tracked the US 10-year Treasury yields amid the market’s rush to risk safety and indecision over the Fed’s next moves.

Elsewhere, the BOC Governor Mecklem highlights the importance of direct communication channels, better listeners and improved understanding of policy during the closing remarks at an online conference on diversity and inclusion in economics and central banking. The policymakers earlier termed the inflation fears as ‘transitory’ but eyed a longer phase of higher price pressure, indirectly signaling tighter monetary policy going forward.

Amid these plays, S&P 500 Futures track Wall Street losses while the US Treasury yields and the DXY remain on the back foot by the press time.

Looking forward, Canada Leading Indicators for November will precede the weekly official oil inventory data from the US Energy Information Administration (EIA) to direct short-term USD/CAD moves. However, major attention will be on the monthly inflation figure from the US.

Read: US October CPI preview: Inflation data unlikely to discourage gold bulls

Technical analysis

While 200-DMA restricts immediate USD/CAD moves around 1.2475, two-week-old support challenges immediate downside near 1.2430. It should be noted, however, that bullish MACD signals and a steady RSI line keep buyers hopeful.