USD/CAD refreshes four-year top above 1.3800 as oil bears dominate

• USD/CAD leaps forward to early-2016 tops while flashing four-day winning streak.
• Oil prices bear the burden of risk aversion, margin increase, ignores geopolitical plays in Iraq.
• The US PPI, coronavirus headlines will be important to watch for near-term direction.

With oil prices declining more than 7%, USD/CAD ignores disappointment from the US fiscal measures as rising to the fresh four-year high of 1.3820 during early Thursday.

WTI drops to $31.10 by the press time as broad risk aversion, as well as news of increasing trade margins on crude future contracts, seem to weigh on the energy benchmark. Also disappointing the black gold traders are increasing oil inventory levels in the US.

On the other hand, US President Donald Trump unveiled details of his much-awaited fiscal measures to confront coronavirus (COVID-19) with tax reliefs and travel restrictions. However, a lack of spending boost got the market’s attention and triggered risk-off.

Following the news, the US 10-year treasury yields dropped further below 0.8% whereas S&P 500 Futures extend losses to the tune of 4.2% by the time of writing.

Looking forward, the US PPI numbers for February, expected to remain unchanged at 1.7%, can offer intermediate clues to the pair traders. However, updates relating to the virus as well as ECB can offer a bit stronger trade directions.

Technical Analysis

Unless declining below May 2019 top surrounding 1.3565, bulls are less likely to stop in their march towards 1.4000 psychological magnet.