USD/CAD: Bears keep baton near 11-week low above 1.3700
|- USD/CAD extends the previous day’s fall from 1.3822, prints four-day losing streak.
- US dollar index (DXY) remains pressured near a two-month low.
- US-China tussle intensifies but calls of Fed’s QE seem to weigh on the greenback.
- A slew of US and Canadian data will join risk catalysts to offer a busy session ahead.
USD/CAD bounces off the intraday low of 1.3742 to 1.3750 amid the early Thursday’s trading. Even so, the Loonie bears remain dominant around the multi-day low flashed the previous day.
Despite WTI’s pullback and the on-going political/trade tension between the US and China, the Loonie pair seems to benefit from the USD weakness.
The US policymakers are on their run to increase hardships for China with nearness to announce multiple sanctions while citing violations of human rights and trade.
However, markets’ risk-tone sentiment seems to take clues from the gradual reopening of the major economies and hopes of further stimulus. As a result, the US 10-year Treasury yields rose 1.6 basis points (bps) to 0.693% with Japan’s NIKKI adding 2.15% gains to flash 21,880 mark by the press time.
On the other hand, the US dollar seems to bear the burden of expectations of the Fed’s next move. The New York Fed President John Williams recently cited the chances of witnessing Quantitative Easing (QE) by the US central bank to avoid the negative rates.
Against this backdrop, the US dollar index (DXY), the greenback gauge versus major currencies, drops 0.10% to 98.84 as we write. It’s worth mentioning that the WTI crude oil futures register 0.58% losses to $32.18 on NYMEX at present.
Even if the US-China headlines and oil price moves could offer intermediate direction to the Loonie pair, a slew of top-tier data from the US and Canadian Current Account figures will make the Thursday a busy day for markets.
Technical analysis
A four-month-old ascending trend line near 1.3715, coupled with oversold RSI, keeps the buyers hopeful of witnessing a bounce towards April month low near 1.3850.
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