USD/CAD Approaches Exhaustion at 1.2830 as Oil Rebounds; BOC's Macklem Comes Under Fire

The USD/CAD pair is showing symptoms of weariness following a mammoth rally from last week's low of 1.2458. The asset has been climbing upward as safe-haven assets have been bolstered by negative market sentiment. While exhaustion signals at monthly highs of 1.2830 may be associated with a more robust recovery in oil prices.

China's pledge to strengthen its economy through conservative monetary policy has given oil prices a boost. Increased liquidity in the economy to boost demand will restore normalcy to oil requirements. The price of oil has recaptured the $100.00 level. The black gold was underperforming as the Covid-19 pandemic spread from Shanghai to Beijing, reigniting fears of a slide in China's aggregate demand. Additionally, the Beijing mass testing was used to call for severe lockdown measures.

It's worth mentioning that China is the world's largest oil importer, and any concerns about the dragon economy's oil demand might have a significant impact on oil prices. Additionally, Canada is the largest oil exporter to the United States, and rising oil prices result in increased capital inflows into the loonie area.

Investors' attention will now turn to Tuesday's speech by Bank of Canada (BOC) Governor Tiff Macklem. Additionally, the US Gross Domestic Product (GDP) number for the third quarter will be released on the same day, and is predicted to decline to 7.2 percent.

USD/CAD