USD/CAD: Stays offered below 1.4000, near fortnight low, during pre-FOMC/US GDP period
|- USD/CAD remains under pressure for the third consecutive day.
- Recovery in oil prices, broad US dollar weakness weigh on the pair.
- Trading sentiment remains mixed ahead of the key data/events.
USD/CAD drops further below 1.4000, currently near 1.3950, down 0.33% on a day, during the early Wednesday’s trading. The pair nears the two-week low flashed the previous day amid broad US dollar weakness and recovery moves of the oil prices.
While the broad US dollar weakness keeps the Loonie sellers hopeful, the recent recovery in oil, Canada’s main export, exert additional downside pressure on the pair. The WTI June futures on NYMEX extend recovery moves from $10 to $14.00 by the press time.
The greenback declines could be attributed to the downbeat US data as well as uncertainty surrounding when the US economy will re-open after the coronavirus (COVID-19) crisis. However, US President Donald Trump keeps pushing for the early restart while rejuvenating the US-China tussle by alleging the dragon nation for the spread of the deadly virus.
It’s worth mentioning that the market’s risk-tone remains mixed during the pre-FOMC/US GDP period, as always. That said, the US 10-year Treasury yields remain mildly positive near 0.62% with stocks in Asia-Pacific struggling between gains and losses.
Moving on, the preliminary readings of the US Q1 GDP and monetary policy meeting by the Federal Reserve will be the key to watch, together with the oil price moves and updates concerning the US-China tussle as well as virus news. The US Q1 GDP is expected to slump to -4.0% versus +2.1% prior while the FOMC is less likely to alter the present monetary policy but a dovish tone of Chairman Jerome Powell can’t be ruled out.
Technical analysis
Considering the pair’s sustained break of the seven-week-old rising trend line, at 1.4005 now, bears are likely aiming for a 50-day SMA level near 1.3900. Meanwhile, an upside clearance above 1.4005 will have 21-day SMA, close to 1.4060, as an additional resistance to watch.
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.