USD/CAD: Pulls back from 50-day EMA despite weak WTI
|- Doubts surrounding the US-China trade talks, FOMC weigh on the USD ahead of the key week.
- WTI remains on a back foot after Iran says talks in Vienna were constructive.
- Lack of data can keep highlighting news headline for fresh impulse.
Having failed to cross 50-day EMA, USD/CAD pulls back to 1.3160 during early Monday.
The pair’s recent weakness can be attributed to the US Dollar’s (USD) overall decline at the start of the key week that includes the two-day trade negotiations between the US and China, together with the Federal Open Market Committee (FOMC) meeting that is largely expected to deliver a rate cut from the US central bank.
Adding to the USD decline could be the US President Donald Trump’s comments over the weekend that “I did not say I’m not going to do something on Dollar”. The statements were in contrast to the earlier communication from the White House that triggered the USD up-moves on late-Friday.
Price of oil, Canada’s main export, recently weakened after parties to the 2015 nuclear deal, including Iran, met and departed without any new consequences.
Given the lack of major data/events scheduled, investors will keep an eye over the trade/political headlines to forecast near-term direction.
Technical Analysis
Unless successfully breaking 50-day exponential moving average (EMA) level of 1.3200, can’t aim for June 21 high around 1.3230, which in turn portrays brighter chances of the quote’s further weakness towards 1.3150 and 1.3100 rest-points.
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