Canadian Dollar continues to decline as Crude Oil falls further

• The Canadian Dollar gave up further ground against the US Dollar on Wednesday.
• A rising US Dollar bolstered by climbing US Treasury yields is sending USD/CAD higher.
• Crude Oil prices continue to deflate, pulling the rug out from underneath the CAD.

The Canadian Dollar (CAD) stooped even lower against the US Dollar (USD) on Wednesday, sending the USD/CAD pair to a fresh seven-month high. The USD/CAD pinged a new high of 1.3780 before the USD finally eased off enough for the pair to ease back to 1.3740.

The Oil-backed Loonie is losing support as Crude Oil barrels declined further on Wednesday, extending recent losses. Oil prices have scorched up the charts recently as concerns about global supply constraints send barrel prices higher, but rebalanced investor outlooks on global barrel production are easing fuel costs back. West Texas Intermediary (WTI) Crude Oil barrels were last seen trading below $84.50/bbl on Wednesday.

The Greenback continues its march up the charts as US Treasury yields continue to punch higher. The 1-year US Treasury yield hit 4.882% early Wednesday as US yields across the curve remain pinned into 17-year highs.

Daily Digest Market Movers: Canadian Dollar falls as oil prices backslide, USD/CAD peaks at 1.3780

• The Canadian Loonie hit a new seven-month low against the Greenback.
• Money markets see a 65% chance of one more rate hike from the Bank of Canada (BoC) this year.
• One more rate hike could provide the CAD with some much-needed support.
• Crude Oil barrel costs are sinking as investors rebalance their forward-looking expectations of supply constraints as production ramps up outside of the OECD.
• CAD bidders will be looking ahead to Thursday’s Ivey Purchasing Managers Index (PMI) for September.
• US ADP figures missed expectations to print at 89K versus the forecast 153K.
• Another US Nonfarm Payrolls (NFP) Friday is on the docket.
• Bank of Canada (BoC) Deputy Governor Nicolas Vincent hit newswires warning that Canadian businesses have been too efficient at passing rising costs onto consumers, increasing bets of another BoC hike and spiking Canadian bond yields higher.
• Canadian government bond yields rose in tandem with US Treasuries, 10-year yields hit their highest rate since 2007 at 4.292%.

Technical Analysis: Canadian Dollar slips further, USD/CAD easing back to 1.3730

The USD/CAD tapped a new seven-month high on Wednesday of 1.3780 before settling back to 1.3730. The pair caught an early bounce from near the 1.3700 level. Wednesday’s bounce sees the pair set to use the 1.3700 level as technical support for a move higher if bullish momentum sustains.

On the daily candlesticks, the USD/CAD is extending gains from the 20-day Simple Moving Average, which saw a bullish rejection of the pair near 1.3450 back in September. Odds of a short-side reversal could be on the cards for the USD/CAD, with the Relative Strength Index (RSI) now tapping into overbought territory.

Technical traders will want to wait for price action to confirm a lack of bullish momentum. However, the USD/CAD has successfully set a new daily high every candle for the last five consecutive trading days.