USD/CAD refreshes 14-month high above 1.36

The USD/CAD pair built on yesterday's strong gains on Tuesday and pushed above 1.36 for the first time since February 2016. After rising all the way up to 1.3626, the pair eased back a little and is now trading at 1.3615, up 0.85% on the day.

Although the US Dollar Index is having a bad day, losing 0.3 points to a fresh five-month low at 98.60, the loonie continues to be sold heavily against its competitors amid falling crude oil prices. The barrel of West Texas Intermediate is losing 0.45% on the day and is trading around $49. Earlier in April, the WTI was able to move up to 54$ amid heightened expectations of an extension to the OPEC output cut deal. However, sustained growth witnessed in shale production in the U.S. continues to weigh on the prices, thus hurting the demand for the loonie.

The RSI on the daily graph shows overbought conditions for the pair as it 's moving above the 70 mark. We may witness a technical correction before the pair meets another buying wave but if the crude oil prices continue to fall, the investors may ignore the technical situation and put further pressure on the CAD.

Technical outlook

With a decisive break above 1.3626 (daily high), the pair could aim for 1.3700 (psychological level) and 1.3735 (2016, Feb. 25 high). To the downside, supports align at 1.3600 (psychological level/Dec. 28 high), 1.3525 (Apr. 21 high) and 1.3410 (Monday's low).