The Canadian dollar has been on a tear recently against its US counterpart recently closing near the 94 cent level. As some have argued, the Canadian dollar is effectively a petrodollar that rises and falls with the price of crude oil as quoted in US dollars.
Certainly this is a strong argument for the past few years as correlation between crude and the Cdn$ is high. When looking at a broader picture and at some Fibonacci levels, one wonders if the we are near the top of this run up toward parity with the US$. The price of crude as we examined in an earlier post is struggling to stay about the $66 (38.2% Fib support) level. With high crude inventory and lower economic activity, has oil run its course and is ready for a pullback? Only time will tell. If it does, the Canuck Buck is almost certain to follow it down.
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