Inflation running too high is the major problem right now for the Fed. Increasing Crude Oil prices is threatening growth and pessimism about the Delta. We are currently seeing that demand for crude oil is getting ahead of supply, based on higher natural gas prices, air travel increases and winter is coming. After the OPEC+ meeting, the strategy of current oil output will remain the same, this will lead to a hike in WTI and Brent Crude prices. With the beginning of this week USD is witnessing a bit of a weakness heading into Friday’s NFP report, which will be critical for the US Federal Reserve. All eyes this week are on Nonfarm payrolls of September, a good number will obviously be bullish for the USD, but it will also have the Fed looking at tapering earlier, enhancing USD even further. In parallel Canada’s Unemployment rate of September report will also be due Friday, comes out at the same time as the US NFP’s. This Friday will be a game changer for USDCAD.
As we all know, WTI and USD/CAD have a negative correlation. With the early hike of WTI, this pair continues to push lower on Monday and seen losing by 0.3% attaining 1.2608 level. support and resistance are equal at 1.2600 level. If this pair fails to break below 1.2590 this pair will continue to be bullish and head toward 1.2620 level first, then 1.2650 second. A break below 1.2590 will initiate a bearish movement towards 1.256.