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USD/CAD Daily Forecast – Loonie Make a Dip Ahead of US Goods Orders Data

Nikhil Khandelwal

Loonie seems to take a downturn after last day’s strong upward rally. The pair has rebounded from the stubborn 1.3503 resistance levels. After remaining silent in the early morning session, the plunge in the pair got triggered. The pair has already lost 0.18% gains ahead of the European session.

Falling Greenback had driven the Loonie down. Today, the US Dollar Index was hovering near 97.81 levels. Trade talks experienced a new drift after Trump gave a public opinion of taking the Huawei into Trade War. The US President had told the media reporters that “Huawei is very dangerous”. Hence, Trump’s intentions to keep the Huawei under Black-list will continue, revealing no signs of resolving the Trade tensions. Following this news, the Greenback slipped, making the Loonie drop at the same time.

Crude Oil WTI Futures had showcased a dramatic performance this week, falling around 11% since Monday. The driving force was intense that the Oil prices breached the active $58.34 bbl support line. The Crude had last touched this lowest point on March 28. During the Asian Session, the Oil prices gained 1.2% showing slow signs of recovery. This price improvement came after the traders felt a firm trend in global trade. As there stays an inverse relationship between the Loonie & Crude, the pair made a plunge.

Due to lack of CAD-related events today, the pair relies on the release of US economic reports in the next session. However, the USD/CAD pair may show some right moves depending on the USD events.

USD/CAD Influencing Events

There are no CAD-specific events scheduled for the day. Nevertheless, Investors anticipate the upcoming USD-specific events. At 12:30 GMT, the US Census Bureau will report the April Durable Goods Orders data. Market set a bearish stance over these significant Order reports. Notably, the Consensus estimates the Non-Defense Capital Goods Orders excluding Aircraft to report near -0.3% over previous 1.0%.

At 17:00 GMT, traders look forward the Baker Hughes US Oil Rig Count which reported 802 last time. Any change in the Baker figures will significantly act on the already beaten Crude WTI Futures.

Technical Analysis

The pair had earlier day tested 1.3502 levels but couldn’t showcase a breakthrough. From there, Loonie slipped down, getting supported near 1.3451 levels. Point to be noted is that the technicals still reflected positive prospects for the pair.

USDCAD 60 Min 24 May 2019

Though the Loonie was moving hand-in-hand with 50-days SMA, the pair was drifting above the significant 100-days SMA. Meanwhile, 200-days SMA (1.3445 levels) appeared to approach the USD/CAD pair, signaling a pivotal reversal at any point. RSI was hovering near 40 levels signifying moderate buying interest. On moving upwards, the pair may experience slight downward push near 1.3513 resistance levels. Over the flipside, robust support lines near 1.3360 levels await the USD/CAD pair.

This article was originally posted on FX Empire

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