USD/CAD Daily Forecast – Loonie Pair to Jump Back into the Uptrend Track

The Loonie pair started near 1.3493 levels and remained consolidated for a while in the initial hours. Laterwards, the pair gained some traction near 1.3495 levels and jumped 21 pips up. The improvement in the USD/CAD pair occurred today on the backdrop of falling crude prices.

The growing Trade War fear among the traders have allowed the Crude Oil WTI Futures to drop 0.7% in the Asian session. Also, on Friday, the Oil prices slumped reaching 52.36 bbl. This remarkable slip had occurred after the US President imposed a 5% tariff on all Mexican exports last week. Recently, now the US has also decided to remove India from the US Generalized System of Preferences. All these had added up to the rising trade tensions among the investor community.

Moreover, in the last week, the EIA had shown a reduction in the US Oil inventories reporting 0.282 million per barrel. Also, the OPEC+ will meet in this month to discuss the price-boosting-cuts, to prevent the falling oil prices.

On the USD front, the Greenback continued to struggle getting uplifted to its previous high around 98 levels. At the moment, the US Dollar Index was trading near 97.67 levels in the morning session. Today, the Investor sentiments remained undermined because of the ongoing US-Sino trade tensions. Moreover, there are no signs of easing the Trade War between the two big Global economies.

USD/CAD Influencing Events

Canadian & US May Markit Manufacturing PMI will come out in a few hours. Loonie pair might show some good movement following the reports.

At 14:00 GMT, the ISM May Manufacturing PMI is something which needs a closer watch. The market expects a 0.96% jump in the index this time. If reports release above the estimates, then the pair might break through the 1.3525 resistance level.

Technical Analysis

1-Hour Chart

The pair’s latest support action from the pivotal 1.3493 levels shows its resilience to get back into the uptrend region. Still, surety for a confirmed uptrend from that point remains doubtful as strong resistance points stand near 1.3548 and 1.33566 levels. The pair might bounce back, hitting those upper resistance lines. A move to the downside remains as the alternate option but should reflect from 1.3493 or 1.3485 support levels. However, Stoch RSI indicated some robust uptrend momentum, confirming bull legs for the pair.

1-Day Chart

The actual positive trend appears more clearly in a more extended time range. Quite nicely, the pair managed to drive up along the 3:1 Gann line maintaining an uptrend. The pair had found significant support at 4:1 Gann line at times of several drops developing a positive outlook. In conjunction with the RSI pointing towards 60 levels, the probabilities for a sustained positive trend remains higher. However, any move below the 4:1 Gann line or 1.3400 levels might signal for trend end. Instead, seeing the consistency in the pair’s movements, the trade might move above 3:1 Gann line, expanding its trend horizon.