USD/CAD Daily Forecast – Loonie Pair at its Almost 4-month High Ahead of Canadian GDP Data

The USD/CAD pair had dropped significantly last day on the back of weak US PCE and Q1 GDP data. Quite surprisingly, the pair took the pick up in the previous hour and rallied from 1.3491 levels reaching near 1.3540 levels. The overnight upliftment in the pair came amid EIA reports showing huge Crude stockpiles.

The market had expected the EIA reports to report -0.857 Million. Anyhow, the reports computed since May 24 displayed -0.282 Million. The Crude prices slipped from $59.50 per barrel reaching near $55.69 per barrel last night. Commodity lost value furthermore due to the rising trade concerns, extending the downtrend even today. Oil prices had touched the two-months low level near $54.89 per barrel. If the commodity prices continue to decline, then that would help the pair to conquer new heights.

Meantime, US President Trump’s latest tariffs on Mexico escalated trade tensions among the investor community. Trump tweeted that the US would impose 5% tariffs on all the goods that come from Mexico. President added that the taxes would increase over time until there is an end to the illegal immigration. Greenback slipped following such tariffs news. The current safe-haven buck had then dropped from 98.25 levels landing near 97.95 levels.

However, optimism revolves around the Loonie pair traders as the pair touched the three and a half month high. Highly significant Canadian GDP figures are on the way, and the market keeps a bullish stance on the numbers.

USD/CAD Influencing Events

At 12:30 GMT, the Canadian QoQ GDP Annualized data will come out. The consensus estimate this GDP data to improve and report near 1.2% this time. Meanwhile, the market expects the MoM GDP to come around 0.3% to the prior -0.1%.

On the USD front, the traders need to have a closer watch over a few significant economic indexes. The Personal Income (MoM) report is anticipated to come 0.2% high, and the Personal Spendings data to decrease this time. The market hopes that the Core Personal Consumption Expenditure Price Index (MoM) will increase to 0.2%. Also, the market expects the MoM GDP data to come positive today. At 17:00 GMT, the Baker Hughes US Oil Rig Count and CFTCs Oil NC Net Position would appear on the economic calendar today.

Technical Analysis

The pair stood above the Ichimoku Clouds (IC), alluding a bull call. The flattening of the Green Cloud of the IC indicates possibilities of the pair to continue moving upwards. The pair had breached the EMA of the IC last night, and currently was hovering above the EMA. The Loonie pair stood above all the significant 50-days, 100-days, and 200-days SMA and this confirms clear developments in the pair. Notably, the pair remained more distant from 200-days SMA than from the 50-days SMA. This position signals for a long-term bullish outlook. Whereas, the 50-days SMA was closer to the pair candle and indicated near-term bearish stance among the traders of the pair. The Relative Strength Index (RSI) was moving above 60 levels. And, this position of the RSI alludes heavy buying.