USD/CAD Daily Forecast – Oil Price Upshot Amid Global Cues Undermining the LoonieThe Loonie is getting dragged due to rising crude prices. During the Asian session, the pair had attempted to resist the downfall but failed to persist. Traders expect upside on the release of US Housing Data.
The Loonie remained consolidated near 1.3428 levels and showed a lack of volatility in the initial trading session. Laterwards, the pair slipped down as crude prices started skyrocketing.
The Crude prices continued to catch the upper trajectory conquering new heights. The Oil WTI Futures had marked the day’s high near $63.65 per barrel amid various global cues. The Middle East OPEC members called for supply cuts for the commodity. Russian participation in this OPEC-led supply cut seems doubtful. Also, Russia is struggling with its Oil business, as complaints of poor crude quality pile up.
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Meantime, US-Sino trade uncertainties have shaken the market and crude prices. Trump’s action against the Telecommunication Giant Company Huawei was quite unpleasing to China. Investors may, at any time, witnessed some strong retaliation over this front. Huawei had already lost some vital business clients. Google has suspended the Android updates for the Huawei devices.
Recently, over enrage, Iran Foreign Minister commented that Trump’s tweets intended to Iran are “genocidal taunts”. The Minister mentioned that the US President should not provoke them and urged to show respect instead. Replying to this, Trump made another similar kind of threatening tweet.
Hence, the crude prices jumped on the combined effect of the Middle East tensions, US-Sino trade chaos, and US-Iran dispute. This elevation in the commodity prices undermines the USD/CAD pair, bringing it further down.
Over the USD side, the Greenback stood at the top levels around 98.12 levels today. The US Dollar Index climbed 18 pips following recent Trump’s announcement. On Tuesday, the US President called for temporary lifting-up the trade barriers on the Huawei. Investors treated this news as a soft-corner over the US-Sino Trade tensions and actively supported Greenback. A rising USD inversely impacted on the Loonie, dragging it downwards and creating many lows.
USD/CAD Influencing Events
The economic calendar remained silent amid lack of CAD-specific events. However, there are few USD events lined up for the day. One of these events is, the April’s Existing Home Sales MoM report. The consensus estimates the report to go bullish and expect the numbers to come around 5.35 million. Laterwards, the Boston Fed’s Eric Rosengren will give his opinions about the Monetary Policy Decisions.
Furthermore, the API will publish the Weekly Crude Oil Stocks computed since May 17. The last Crude stocks reported at around 8.6 million per barrels.
The Loonie pair appeared consolidated near 1.3427 levels today. At the moment, the Ichimoku Clouds suggested strong bearish prospects over the Cable. During the Asian session, the red Cloud overshadowed the pair, developing a bearish stance. However, the Cloud also provided a glimpse of the future resistance point near 1.3433 levels. The USD/CAD pair may find some support at 1.3415 levels while some resistance near 1.3447 levels. Moreover, if the Loonie continues to fall, then the next support point awaits near 1.3377 levels.
The Moving Average Convergence Divergence (MACD) displayed bearish signals, lying below the dividing line. Also, the spikes in MACD was tilting downwards, showing a dormant trend in the market. The Loonie remained in the lower vicinity of the Bollinger Bands (BB), alluding a bear trend. Relative Strength Index (RSI) was hovering near 42 levels, indicating moderate buying interest.