USD/CAD Daily Forecast – Downtrending Loonie Pair Might Reverse at 1.3482 Support Handle

The Loonie pair continued to cool down from its top monthly levels over API Weekly Crude Inventories report and BoC’s Interest rate decision. After knocking off the 1.3545 pinnacle levels yesterday, the pair was trading near 1.3493 levels (-0.39%) today.

Amid worsening US-Sino trade tensions, the Crude WTI Futures had touched the $56.90 bbl bottom last day. The commodity price dropped drastically over demand concerns. Quite surprisingly, the Oil prices took the pick up in the last hour yesterday following API Weekly reports. The market expected the Crude Stockpiles computed since May 24 to come near 2.400 million. But, the actual figures came as -5.265 million. Crude prices reacted with huge green candles realizing such a broad demand side. The upward rally continued into today’s session, reaching near $59.68 bbl. Anyhow, regular OPEC+ supply cuts ensured capping the Oil gains. The next catalyst to impact the commodity’s price movement is the EIA Crude reports about to come at around 15:00 GMT.

With an improvement in the Crude prices, the commodity-linked Loonie also appeared grasping the heat from the Oil price upsurge. The Loonie had remained depressed on Wednesday following BoC’s Interest rate decision. The policymakers believe the fluctuations in the economic trend to possess a short life cycle. The Bank Officials also added probabilities of disruptions to the Canadian economy out of the global cues like Trade War. However, they expect the situations to revert to normal conditions soon.

On the other hand, the USD was still at the top levels despite a minor plunge earlier the day. The US Dollar stays buoyed as weakness set in its rivals. The major currencies weighed against the Greenback like the Fiber and Cable were underway strong downtrend. In the next session, Market experts anticipate a lower US Q1 GDP this time over the prior one. If the reports stay lower-than-expected a pullback in the Greenback would be imminent, further hammering Loonie pair.

USD/CAD Impacting Events

On Thursday, the Current Account for Quarter 1, is an only significant event for the Canadian Dollar.  The consensus estimates the Current Account statistics to report around negative 18 billion to the prior negative 15.48B. Later, the BoC’s Senior Deputy Governor will give her opinions about the country’s economy.

For the US, there are few significant events lined-up for the day. In the European session, the Q1 Annualized GDP will come out. The market expects the GDP data to decrease by 0.1% this time. Also, the Continuing Jobless Claims computed since May 17 is anticipated to come near 1.662M whereas the Initial Claims to report near 215K. Furthermore, economic releases include the GDP Price Index, the PCE data, and the Home Sales figures. The consensus estimates GDP price index to appear bullish this time. And they anticipate the QoQ PCE Prices and the Core PCE for Q1 to remain in-line with the previous numbers. Over the April Home Sales MoM is expected to go bearish on the USD. At 15:00 GMT, the EIA will report the Crude Oil Storage Change calculated since May 24. The Street analysts hope the Crude storage to decrease and report around -0.857 million.

Technical Analysis

The Ascending Triangle on the Chart, confirms an uptrend for the USD/CAD pair. The pair was hovering above all the significant Simple Moving Averages (SMA), suggesting a bull call. Notably, the 50-days SMA crossed path moving above the 100-days and 200-days SMA today. Such a sudden intensified momentum in the short-term SMA indicates a less bullish trend in the nearby upcoming sessions. However, over a longer timescale, the primary trend remains a positive one. The currently downward moving Loonie pair was heading towards 1.3483 support line and might revert from this pivotal point. Also, the Relative Strength Index (RSI) was hovering near 53 levels, alluding heavy buying.