The Loonie pair had closed on Friday near 1.3410 levels marking weekly high mark. Today, on a fresh trading session, the pair appeared to linger within 1.3406/15 range top levels. The meter of weakness in the pair pointed towards low for the rest for the day amid lighter economic calendar.
Meanwhile, the USD Index stood firm near 97.59 levels after making a swing high on Friday. The last upsurge in the Greenback came as the May Retail figures showered with some higher-than-expected reports. Also, the May MoM Industrial Production data reported 0.2% higher this time, in the middle of US-China trade tensions. Ahead of the day, the Greenback might show some good upward movements making the Index touching the 2/1 Gann fan. Long term bulls might overtake the near term ones as the 200-days SMA appeared to dive below the 100-days SMA.
Despite that, the uptrend in the USD Index must remain sustained in the short term or at least until today.
Canada’s biggest export item – Crude lost ground in the Asian hours from 52.81/99 levels amid worsening Middle East tensions. There is an inverse relation between Oil prices and USD/CAD pair. Hence, any fall in the commodity prices always acts as a definite booster for the pair. The fall in the prices came in after the statement of US Secretary of State Mike Pompeo. The Official said that Washington would take all necessary actions to deter Iran from making further attacks. The claim was over assumptions that Iran is behind the recent Oil tanker attacks. As a result, due to escalating US-Iran tensions market expects a decrease in the commodity demand, lowering the prices.
USD/CAD Influential Events
There are hardly any momentous events lined up for the day to impact the pair’s movements throughout the day. However, there are some mid and low volatile events in the European session. Economic calendar stands lighter amid lack of USD events for the Monday’s session after an extraordinary Friday session.
Statistics Canada will release the April Investment Securities report at around 12:30 GMT. Anyhow, the spotlight remains over BoC’s Schembri Speech. The Official would talk on the economic outlook for the country. The Bank had mentioned earlier that the economy had reported weakening reports since the last few quarters. Hence, BoC expects a quick pickup through the rest of 2019.
In the near term, one can expect a slight downturn in the pair’s movements was seeing the SMA. The 50-days SMA had risen in momentum on June 14, moving above the significant 200-days SMA. Notably, the pair might take some intense bullish action in the medium term as 200-days SMA trade above the 100-days SMA. The pair was moving well intact in the upper channel of the Bollinger Bands maintaining a hold on the uptrend. Overhead resistance remains near 1.3431 levels while on the downside support stalls near 1.3328 levels.
The pair was making attempts to get inside the Green Ichimoku clouds. If the technical indicator acted as a perfect resistance at this point, then the pair might rebound soon. The USD/CAD pair on rebounding might experience some support lines near 1.3238 levels. However, the chances of such a rebound seem lower as the near term 50-days was heading south, calling the bulls. Most likely, the pair must breach the Green Ichimoku Clouds trading near 1.3422 marks.
This article was originally posted on FX Empire
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