USD/CAD seesaws near 15-week low on USD weakness, WTI rise
|- Bears benefit from upbeat Canadian data, dovish Fed and WTI strength.
- Second-tier US and Canadian economics can direct immediate moves.
- Optimism at trade front also plays positive tune for the CAD.
With WTI increase adding further downside pressure into the post-Fed declines of the USD/CAD pair, the quote seesaws near 15-week low while taking the rounds of 1.3255 during early Thursday.
Upbeat Canadian consumer price index (CPI) numbers and higher than forecast contraction in the EIA US crude oil stocks provided initial strength to the Canadian Dollar (CAD) during Wednesday.
The declines were stretched after the US Federal Reserve increases the chances of a rate cut and dragged the US Dollar (USD) further to south.
Carrying the move forward was market’s risk-off sentiment during early Thursday that fetched the 10-year US treasury yields to sub-2.0% level for the first time since November 2016.
It should also be noted that optimism surrounding the US-China trade deal adds strength into the CAD as all commodity-linked currency (including CAD) are likely to benefit from the positive news for China.
Traders may now look for Canada’s May month ADP employment change and the US weekly initial jobless claims for further direction. While the Canadian employment stat rose to 61.7K during its previous release, the US unemployment claims may soften to 220K from 222K during the week ended on June 14.
Technical Analysis
Sellers may wait for a sustained break below late-February highs near 1.3245 to target 1.3180 and February month low around 1.3113. Alternatively, 200-day simple moving average (SMA) at 1.3281 can keep limiting the pair’s near-term advances, a break of which may trigger fresh upside to 1.3355 comprising 100-day SMA and then towards current week’s high of 1.3434.
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