USD/CAD bears taking on the bull's commitments at 20/50 DMAs
|- On a break of the 20/50-DMA, (1.3250), a resumption of the downtrend will be back in vogue.
- Risk flips more positive, CAD rallied with a rise in oil prices.
USD/CAD has been showing signs of exhaustion on the upside and is beginning to turn south as the loonie firms up across the board risk appetite made a partial recovery in Europe and New York with President Trump switching back to a more conciliatory tone on China trade prospects.
The immediate reaction supported risk assets and CAD rallied with a rise in oil prices. Trump’s comments at the G7 on China, claiming that he had received calls from China over the weekend, seeking talks. However, the official commentary from the Chinese was unable to verify that calls had taken place which leaves a dark cloud over risk appetite.
As for data, the US factory orders for durables goods posted a healthy 2.1% gain in July but volatile transportation goods accounted for much of the upside surprise. Bookings excluding transportation fell 0.4%. Meanwhile, core durable goods shipments, a close proxy for business investment, slipped 0.7% (est +0.1%) and the previous month was revised lower, signaling overall ongoing caution in capital spending.
USD/CAD levels
The price remains capped by the 200-day moving average (DMA) is testing the 20-DMA. If price resumes back to the 38.2% on a break of the 20/50-DMA, (1.3250), a resumption of the downtrend will be back in vogue, targetting the 1.28 handle - 1.3350 is the near-term target to break still on the upside which guards the 1.34 handle and mid-June highs.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.