USDCAD Range Bound as Crude Oil Tests $70
The USD/CAD caught some fresh bids on early Asian market hours and tested 1.2920-25 price range today morning. A combination of diverging forced helped the pair to continue gaining positive traction for the fourth consecutive session and build on this week’s positive rebound from the 1.2745 region, 1-1/2 week lows set on Tuesday. North Korea’s response in which stated that the country is still open for negotiations despite US President Donald Trump’s decision to call of the meet has calmed down the market nerves. This along with modest gains made by US Treasury bond yields during today’s Asian market hours has helped US dollar gain momentum against Loonie.
USDCAD Range Bound
Meanwhile, the ongoing bearish slide in crude oil prices, further aggravated by news reports that OPEC and non-OPEC members discussed increasing oil output by around 1 mbpd, further weighed on the commodity-linked currency – Loonie and provided an additional boost for US dollar. Crude oil price for WTI is currently trading around $70.15 down nearly 0.60% when compared to yesterday. Intraday bias in USD/CAD remains neutral as it is expected to move in range of 1.2728/2996. Another factor for decline in Oil price can be speculated as increased production in the U.S. As per latest reports with U.S. oil inventories rose by 5.8 million barrels in the week to May 18 to 438.1 million barrels.
Looking at macro data, corporate profits update released yesterday in Canadian market was better than expected however it had very little impact as Loonie lost ground to Greenback. Moving ahead, today’s release of the US durable goods orders and a scheduled speech by the Fed Chair Jerome Powell would now be looked upon for Cues to place new bets on the last trading day of the week. Canadian market will see update on Budget balance but even this news is expected to have very little effect on Loonie. Expected support and resistance for the pair are at 1.2853 / 1.2832 / 1.2822 and 1.2920 / 1.2948 / 1.2995 respectively.
This article was originally posted on FX Empire
