USD/CAD Daily Forecast – Loonie Flutters at its Monthly Lows Over Crashing Oil Prices

Loonie gained extra power in the morning session on the back of massively plunging Crude prices. The USD/CAD pair rushed up, thrashing the two strong resistance levels at 1.3500 levels and 1.3514 levels. With this significant upliftment, the pair tapped the top monthly levels near 1.3521 prices.

After starting the day near $58.88 bbl, the Crude prices failed to gain further traction and kept losing value. Today’s Crude chart appeared like a negative exponential curve since opening. The commodity got a stoppage to its plunge rally near $57.67 bbl support point. The escalating US-China Trade tensions remained the key player to deteriorate the Crude prices. The growing trade issues between the two giant world economies continued setting fears for a global market slowdown. Also, the Middle-East region is undergoing through a severe geopolitical crisis, and the US-led-sanctions on Venezuela persist. However, the OPEC-nations continue to proceed with their supply cuts to elevate the depreciating prices.

Meanwhile, the OPEC and Russia will conduct a meeting in the second half of June, to discuss future Oil policy. If the trade tensions continued to prevail, then the Crude prices will remain under due pressure until then.

On the USD front, the Greenback appeared heading to reach near 98 levels today. Yesterday, the American Dollar got uplifted amid the bullish Consumer Sentiments. However, in the Asian session, the US 10-year Bond yield reported a 2.4% decrease. But somehow, the US Dollar Index maintained its safe-haven-status despite a drop in the US T-bonds. The upcoming economic docket for the US is much awaited to appear green and Loonie might benefit out it.

USD/CAD Influencing Events

On Wednesday, the economic calendar highlights the release of the most volatile CAD events. These include, the Bank of Canada (BoC) Rate statement and the Interest Rate Decision computed since May 24. Notably, the Governor of BoC in his last press conference said that the Rates would remain intact until the Canadian economy rises. The Governor referred that the present economic growth is slow, and hence, the rate change is not favorable. Therefore, the consensus estimates remain in-line with the prior rate of around 1.75%.

At 11:00 GMT, the US MBA Mortgage Applications from May 24 will come out. And, the Redbook (Both YoY & MoM) report will appear in the European session. Meanwhile, the market expects the monthly Richmond Fed Manufacturing Index to report around 6 points this time. Furthermore, the API weekly Crude Oil Stock calculated since May 24 would display. The last Crude stocks had reported near 2.4 million.

Technical Analysis

The pair was hovering above the Ichimoku Clouds (IC), signaling bull call. The Loonie clung above the Base Line of the IC, and this position referred to strong bullish prospects. Also, the Red Ichimoku Cloud appeared shrinking, indicates further upliftment on the pair. The Relative Strength Index (RSI) stood near 70 levels. These sound RSI readings imply a strong buying sentiment among the Investors. Moreover, the Moving Average Convergence and Divergence (MACD) appeared to generate some robust bullish signals.