USDCAD around Week’s High Ahead of US GDP Results

USDCAD has been on bull run across the week supported by positive economic data and high treasury yields. However the loonie has managed to balance itself against US dollar ahead of GDP data. While US dollar continues to remain strong, momentum in 10 year US treasury bonds have gone down as yield has crossed 3% mark. CAD bulls that slowed down due to dovish stance from BOC governor Poloz’s speech are starting to gain momentum again. GDP Q1 preliminary data plays a key role in CAD gaining momentum during today’s trading session. While other major currencies such as EUR, GBP and JPY  get pummelled, the loonie has managed to balance itself as visible from the pair’s performance during today’s trading session in Asian hours. The pair has managed to remain within the weeks high while the greenback has managed to pull off a steep upward climb across other major currencies.

USDCAD Buoyant But CAD Looms

Canada is one of major players in Oil market and crude oil price has been on rise recently due to Iran tensions. Brent and WTI futures reached as high as $74.58/b & $68.46/b during yesterday’s trading session. Oil price continues to rise as supply tightens amid strong demand. Traders are snapping up bets that Brent crude will rise to $80 a barrel as U.S. President Donald Trump mulls renewing sanctions on Iran while conflict roils parts of the Middle East. Investors in Brent now hold almost 137 million barrels worth of $80 call options, 37 percent more than they did two weeks ago, according to data from the ICE Futures Europe exchange. The spike comes as F&O markets show their strongest call-bias since 2014, when oil traded above $100 a barrel.

If the situation continues and Oil price continues to spike, Canadian market will see great bullish influence and loonie will easily gain the upper hand over US dollar. Analysts are already of opinion that a bearish Q1 GDP could help Loonie gain bullish momentum. If the GDP readings today comes out bearish and Oil prices cross above 75 or managed to trade within range of 73 to 78 we can see loonie make a bullish breakout in near future. Expected support and resistance for USDCAD are in a range of 1.2810/1.2740 and 1.2897/1.2940 respectively.