The Loonie outperforms the Greenback due to the “risk-on” environment

Daily Currency Update

CAD - Canadian DollarWith the lack of critical local economic releases, the "risk-on" environment and crude oil price action seem to be the only positive catalysts for the Loonie. Crude oil has been trading strongly during the week, and in spite of that, it has not had much direction within the last few hours. The market sentiment towards the "black gold" is positive, just as it is for the Loonie. The OPEC and its allies agreed to extend production cuts into 2020 earlier this month, and the IEA is saying that they may need to reduce production even more as the market has returned to surplus. A barrel of West Texas Intermediate is trading firmly around $60 as market participants are more concerned about the immediate threat of a Tropical Storm Barry-induced production shutdown and tensions in the Middle East. However, the decrease in crude oil demand globally is adding to the risks of another glut in the short-term.Technically speaking, the USD/CAD pair has space to fall to the mid 1.29s and hold a long-term uptrend that comes from September 2017. However, this morning, it has failed to break to the downside, trading at support and bouncing from 1.3040. If it holds above the support, it might test resistance levels: 1.3070, 1.3087, followed by 1.3097.