USD/CAD Daily Forecast – Loonie Trading +0.21% on the Backdrop of Strong Oil Plunge

The Loonie appeared to extend the previous day’s consolidation phase into today’s session. The pair was fluctuating within the range of 1.3430/50 levels. During the Asian session, the USD/CAD was taking rounds near 1.3436 levels, attempting to catch new heights. At around 04:05 GMT, a fresh high was recorded near 1.3448 levels today.

Crude is Canada’s largest export item, and hence any variations in the Commodity’s prices would impact the Loonie. Today, the Oil WTI Futures had recorded a loss of around 0.39%, trading near $58.87 per barrel. The figures initiated a decline amid rising Middle-East tensions and the OPEC-led supply cuts. As per recent reports, US President Donald Trump has reaffirmed his stubborn stance against the sanctions over Iran. Trump added that he was interested only to block Iran’s access to Nuclear weapons. Also, President quoted while in his latest visit to Japan that  “the US is not ready to make a deal with China”. Following such a pessimistic global environment, the Crude gains remained capped, allowing the Loonie to explore its upside.

On the USD front, the Greenback displayed mixed movements in the early session. The US Dollar showcased high swing movements touching the 97.78 levels. As there lacked any new official headline over trade talks, the growth of Greenback seemed limited.

USD/CAD Influencing Events

On Tuesday, the economic calendar remains silent over the CAD influencing events. However, there are few US Dollar Index impacting events lined-up for the day. Firstly, at 13:00 GMT, the S&P/Case-Shiller Home Price Indices (YoY) (Mar) will get broadcasted today. Over these Indices, the market has remained bearish with their estimated numbers to reach near 2.8%. Secondly, the US Consumer Confidence would display unexpected figures. Generally, a high reading is also positive for the USD, while a low reading is negative. Thirdly, the Dallas Fed will provide the Monthly Manufacturing Business Index. Laterwards, the figures of the average yield on 3-months and 6-months T-bills auction will release.

Technical Analysis

Loonie remained clinched near 1.3438 levels in today’s session. Sound resistance levels near 1.3500 levels had capped the pair gains on May 23. From there, there was a downward trend observed in the pair which got paused near 1.3437 levels. However, there persists a hidden bull trend as the pair travel above the 200-days Significant SMA. Meanwhile, talking about the near term trend, the 50-days SMA and 100-days SMA appeared to intersect near 1.3442 levels. Anyhow, the near term trend indicating SMAs hovered above the pair. This prospect develops a bearish call for the pair’s future near/medium period movements. Also, the Relative Strength Index (RSI) was heading north above the 50-mark as investor interest set in. On the downside, the pair may experience supporting force while trading near 1.3360 levels.