USD/CAD retreats further below 1.3600, still heads for highest close since 14 months

• Loonie trims losses versus US dollar but declines further against NZD, AUD. 
• Equity prices off lows, volatility remains elevated, oil down 18%. 

The USD/CAD pulled back further from the highest level in almost three years as crude oil prices trimmed losses and more recently, on a recovery in equity prices. Earlier today, the pair peaked at 1.3756 and since then it retreated more than 200 pips. 

USD/CAD off highs, WTI off lows 

As of writing it trades at 1.3530, 110 pips above Friday’s close. Among the G10 currencies, the loonie is the worst performer affected by the crash in crude oil prices. Over the last hours, crude moved off lows but still remains sharply in negative. The WTI barrel trades at $33.80, down 18%. 

The collapse in oil created chaos across financial markets. Wall Street indexes are falling now “just” 4.5%. After the opening bell, trading was halted 15 minutes because of a 7% plunge in prices. Since then, equity prices have stabilized and now are recovering, helping the correction in USD/CAD. 

Levels to watch 

The weekly opening gap is still open. The pair needs to drop to 1.3420 to close it. Before that level support might be seen at 1.3500 and 1.3460 (February high). On the upside, 1.3600 is the immediate resistance followed by 1.3655 and 1.3700 (psychological).