The Loonie pair was stuck in the lower part of the Chart near 1.3365/82 range level in the Asian session. The pair had managed to remain sustained within the top marks near 1.3430/00 levels since last few sessions. However, the previous day’s slip from its weekly high brought in a 0.51% drop in the pair’s overall movement.
The USD/CAD pair had suffered such a sharp pullback as the Oil continued to gain on Wednesday. The Crude prices had soared more than 5% yesterday, shooting from $51.75 bbl reaching $54.44 bbl. The Global demand for the commodity increased after Trump tweeted about his next week meet with Xi. Last day, President Trump mentioned that he had a “very good” call with the Chinese President. Trump added that he would have an extended meeting with Xi in G20.
Another supporting point for the Crude upsurge was the rising Middle East tensions. The US continued to blame Iran over last Thursday’s attacks. Anyhow, Iran repeats denial of the same. The US is deploying about 1,000 more troops to the Middle East for what Washington said were defensive purposes, citing concerns about a threat from Iran.
Nevertheless, the OPEC and non-OPEC members would meet up on July 10-12 to discuss regarding the extension of supply cuts.
Last night, the API Weekly Crude Count since June 14 reported -0.812 million over previous 4.850 million. A decline in the weekly figures hinted of a significant rise in the commodity prices. Hence, the USD/CAD pair might continue to experience an opposite effect out of crude upliftments.
Significant Economic Events
Forex traders keep their eyes glued to the FOMC meeting scheduled at around 18:00 GMT. Trump had earlier displayed his dissatisfaction with the Fed’s monetary policies. The President had urged the Fed many a time for an interest rate cut. However, the Fed appeared to follow its own set of protocols staying neutral. Chairman Powell believes that the US economy is still stronger and expects a recovery soon out of near term fall. Anyhow, Trump plans to fire the Fed Chief, depending upon today’s statements.
On the Canadian front, Street Analysts stay bearish over the BoC YoY May CPI Core. The Index will come at around 12:30 GMT.
The uptrend in the pair’s movements seemed to divert path and lose hold of the positive trend. The short term 50-days SMA had already reached above the pair developing strong bearish stances. Also, the 100-days SMA was moving head-to-head with the pair, looking for opportunities to jump above the pair. Though the sentiment is negative in the near period, the pair stood well above the 200-days SMA. This position of the most significant SMA creates hopes for the positive trend to revert soon. Since the last few sessions, the RSI was lingering near 40 levels.
From a broader view angle, the pair seemed to struggle to maintain the uptrend. Anyhow, the pair was taking rounds in the third level of Gann Square signaling trend sustainability. At the time of writing this article, the USD/CAD pair was resisting to move above the Gann arc. However, any movement below 1.3373 levels would put an end to the upward rally.
This article was originally posted on FX Empire
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