Members of OPEC agreed to increase oil production by September of this year. Production cuts are around 5.8 million barrels a day, and OPEC is going to stop these cuts by increasing barrel production by 400,000 per day. Members are now starting to want to increase production as global economies begin reopening despite the growing rate of the delta strain. USOil is up 0.30% on the day today at the time of writing this.
How this affects Canada
A big factor in Canada's GDP is oil production, and an increasing demand in oil helps both the price of oil and the Canadian economy. An increase of supply will lessen demand which could hurt Canada while a cut in barrel production is good for the loonie.
It seems like an increase of 400,000 barrels each day starting August of this year is a sign of economic recovery, but that doesn't seems like a lot compared to the 5.8 million cut each day. So, there's an argument that supply might not be enough to outpace the demand for oil on a global scale. I think there's an argument for both sides here, and it depends on which currency pair you look at. I am bullish CADJPY, USDCAD & CADCHF, bearish GPBCAD.
GCAD came down today 0.6% and is nearing support around 1.72590 if price can't find support slightly above at its 200 DMA. Higher lows on the 1D chart have started a rising trend line formation.
CJ coming up off lows today and formed a double bottom on the 1D chart. Price didn't quite reach its 200 DMA, but does show some rejection from the support zone. Resistance is around 87.107.
CADCHF bounces off its 200 DMA on the 1D chart and is hitting resistance. The pair is up 0.80% for the day as it held the moving average really well.
USDCAD comes off highs on the daily chart and shows some rejection from the top. New support is around 1.26530 and its 200 DMA should price come back down to this level.
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