USD/CAD Daily Forecast – Short Uptrend Expected Ahead of US Goods Orders DataOil prices upsurged more than 1% in the early hours. On the 4-Hour Chart, the Ichimoku Clouds moved overhead the pair signaling bearish trend continuation.
The Loonie pair had initiated trading on Wednesday near 1.3170 levels and kept hold of a tiny uptrend. The pair cooled down as soon as it tested the sound 1.3192 resistance level. After correcting slightly, the USD/CAD pair continued to consolidate near 1.3180 level in the Asian session.
Meantime, the US Dollar Index had already breached the downtrend yesterday. This action reveals signs of a trend reversal. The Greenback was moving above the near term 50-day SMA. Today, the Index was attempting to test the 100-day SMA near 96.31 level.
Anyhow, the overall trend remains adverse as the significant 200-day SMA stay overhead the Index. Hence, the current distortion in the downtrend might short live and would remain again stumbled.
On the other side of the equation, Oil prices upsurged more than 1% in the early hours. The upliftment in the commodity prices came after the release of API crude data. The data reported -7.550 million over -0.812 million previous figure, showing an increase on the demand side. “Oil prices have been squeezing higher on escalating tensions in the Middle East. But with late-day draws showing up in the API report, this is a strong signal for the energy market,” said Stephen Innes, a managing partner at Vanguard Markets.
Significant Economic Events
There are no significant CAD-specific events lined up today to affect the pair’s daily movements. However, some USD-specific economic events might have a massive impact over the pair.
The most crucial one is the May Non-defense Capital Goods Orders excluding Aircraft. The market stays quite bullish over the reports, expecting it to record 0.1% over previous -1.0%. The Street analysts hope most of the Durable Goods Orders to report on a positive note this time.
EIA Crude Oil Stocks Change computed since June 21 will come out at 14:30 GMT. This Crude Inventory report would act as a catalyst for the Oil price volatility. The consensus estimates the figures to come around -2.891 million over the last -3.106 million, expecting growth in demand.
The USD/CAD pair showcased a descending triangle trading pattern. The swing highs portrayed a negative trend while the swing lows remained reluctant to move beyond 1.3153 support levels. Any price action taking the pair below this healthy support line would call for further fall in the pair. Notably, the significant 200-day SMA was hovering well above the USD/CAD pair near 1.3283 level. The Relative Strength Index (RSI) was heading south and indicated 41.21 level.
The main trend remained downtrend from a broader view. The Ichimoku Clouds moved overhead the Loonie pair signaling bearish trend continuation. Meantime, the base line and the conversion line appeared to move, approaching the pair. Hence, a trend reversal might happen at any point in time.