USD/CAD: Better bid near 1.3350 amid oil pullback

Buyers concentrated more on the oil pullback based upon EIA stocks report over the USD weakness.
The second-tier data points could join updates from the US-China trade discussions to direct near-term moves.

Anil Panchal FXStreet

The USD/CAD pair is taking the bids around 1.3350 while heading into the European open on Thursday. The quote falls short of portraying the US Dollar (USD) weakness as oil prices witnessed pullback from the current year’s high amid heavy build up in the US crude stocks. Next up in the pair watchers’ radar could be second-tier data from the US and Canada, coupled with developments surrounding the trade negotiations at Washington.

The USD, also known as the greenback, declined against the majority of its counterparts on Wednesday as optimism surrounding the US-China trade deal dimmed the US currency’s safe-haven demand. However, a surprise increase in the official US crude oil stocks triggered the energy’s pullback, that in-turn didn’t allow the USD/CAD pair to enjoy greenback weakness.

The official Energy Information Administration (EIA) figures of the US crude stocks change registered a surprise increase of 7.2 million barrels compared to analysts' estimate for a draw of 425K barrels for the week ended on March 29. Crude being the largest export item of Canada, declines in the energy benchmark pulls the Canadian Dollar (CAD) back too.

Moving forward, details from the trade negotiations between the US lawmakers and the Chinese Vice Premier Liu He’s team will be in highlight. Positive news report could drag the pair downwards as it not only reduces the USD’s safe-haven demand but also favors the crude buying.

At the data front, the US initial jobless claims for the week ended on March 29 and Canadian Ivey purchasing managers’ index (PMI) could offer immediate direction to prices. While the US unemployment claims could rise to 216K from 211K seasonally adjusted Ivey PMI for March might increase to 51.1 from 50.6.

USD/CAD Technical Analysis

While 1.3370 and 1.3450 are likely immediate resistances for the USD/CAD pair, 1.3470 and 1.3500 can entertain bulls afterward.

On the downside, 100-day simple moving average (SMA) level of 1.3315 and 50-day SMA level of 1.3280 may please sellers ahead of pushing them to 200-day SMA level around 1.3200.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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