USD/CAD prefers to cheer US dollar weakness over WTI fall
|- USD/CAD remains depressed amid the broad US dollar weakness.
- WTI’s weakness over OPEC+ disagreement over output cut fails to strengthen the pair.
- G20, US CPI will be watched for fresh impulse.
Although WTI stays depressed from the lack of agreement on an output cut, USD/CAD prefers taking clues from the broad US dollar weakness while declining to 1.3955, down 0.15%, amid early Good Friday.
Despite the Organization of the Petroleum Exporting Countries (OPEC) agreement over 10 million barrels per day of output reduction, the final say of the OPEC+ group, including Russia, is still awaited as Mexico recently hit against the moves. As a result, today’s G20 meeting of the energy ministers will be important to watch for the final decision.
On the other hand, the US dollar bears the burden of disappointing Jobless Claims and Michigan Consumer Sentiment while also following downbeat comments of the Federal Reserve Chairman Jerome Powell.
It should also be noted that comparatively better coronavirus (COVID-19) situations in Canada over the US also weigh on the pair.
In addition to the G20 updates on the much-awaited production cuts, the US Consumer Price Index (CPI) data for March will also be crucial as it will show the actual impact of the pandemic on the price pressures. Forecasts suggest, US CPI drop to 1.6% versus 2.3% prior on YoY while CPI ex Food & Energy could decline to 2.3% from 2.4%.
Technical analysis
Unless providing a daily close beyond a 21-day SMA level of 1.4160, the pair can keep gradually declining towards 50-day SMA near 1.3700.
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