USD/CAD Daily Forecast – Downfall Triggering as the Pair Loses Hold of 4:1 Gann LineThe US May YoY Average Hourly Earnings and Non-farm Payrolls are something that needs a closer watch on release. Crude prices soared 1.67% last night. The Parabolic SAR that moved above the pair confirms the bearish trend in the short term.
The Loonie pair was taking a consolidative stance near the 1.3350 bottom levels in the Asian trading session.
Yesterday’s plunge rally in the Greenback contributed the maximum part of the overall downward push in the USD/CAD pair. The USD Index was down amid some disappointing Unemployment data, Q1 Non-Farm Productivity, and Unit Labor costs. Since morning, the US Dollar had stuck near 97.05/07 levels lacking any particular direction.
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Crude Oil WTI Futures soared from $51.47 bbl reaching $52.33 bbl last night. The Commodity prices eased as US-Mexico trade tensions seemed to lower and OPEC continued their regular supply cuts.
In the last day’s meeting, the Mexican Officials displayed efforts aiming to reduce the illegal immigration to the US as per Trump’s demands. Officials proclaimed that they would stall enforcement in the Guatemalan border to prevent refugees from getting into the US. They also mentioned plans to set up asylum in Mexico itself. President of Mexico assured eradication of transnational groups who make money out of regular trafficking migrants across the border. The Mexican counterpart believes that the country’s efforts to curb illegal immigration should mollify Trump. However, the US President stays firm on his stand to impose tariffs from Monday.
Significant Events to Tweak the Pair’s Movements
Ahead of the day, significant USD-specific and CAD-specific events line up at around 12:30 GMT. The May YoY Average Hourly Earnings and Non-farm Payrolls are something that needs a closer watch on release.
The market expects the crucial Canadian Unemployment Rate to stay in-line this time with the previous 5.7%. The Canadian May Net Change in Employment will report in the same time-frame. This time, the analysts take a highly bearish stance over the figures to report near 8K over last 106.5K.
The USD/CAD pair was heading upwards towards the center line of the Bollinger bands (BB) showing uptrend signals. However, the orientation of the Simple Moving Averages provides a contrary conclusion. The 50-days SMA was traveling close the pair as compared to the overhead lying 100-days and 200-days SMA. Anyways, all the significant SMAs hovered well above the pair alluding bearish trend. The Parabolic SAR that moved above the pair confirms the bearish trend in the short term. Even if the pair attempts to rise, it might rebound from resistances: 1.3422, 1.3432, 1.3526, and 1.3567 levels.
The Gann Fan shows that the uptrend in the Loonie pair might exhaust soon. The pair had almost broken the 4:1 Gann Line which had acted as strong support multiple times earlier. The Relative Strength Index (RSI) indicated 39 levels, alluding insufficient momentum to uplift the pair. The USD/CAD pair must revert above the 4:1 Gann line quickly to sustain long term uptrend intact.