- USD/CAD takes the bids as WTI weakness, trade pessimism contrast broad USD strength.
- The absence of major data/events keeps highlighting trade/political headlines.
Following its U-turn from 200-day exponential moving average (EMA), the USD/CAD pair extends to the run-up to 1.3300 during early Wednesday.
The quote failed to enjoy oil price rally on Tuesday amid doubts surrounding the September month trade talks between the US and China, coupled with increasing odds of a global recession, mainly based on the deepening of the US two-year and 10-year treasury yield curve.
The US and China have been at loggerheads ever since the US President Donald Trump announced harsh anti-China measures after Beijing retaliated to the Trump administration’s previously announced tariffs.
Adding to the price recovery could be the overall strength of the US Dollar (USD) based on upbeat consumer sentiment and manufacturing activity data. The greenback buyers mostly ignored the US President’s another criticism of the Federal Reserve’s monetary policy.
Investors will now concentrate on trade/political news headlines and weekly oil inventory report from the Energy Information Administration (EIA) for fresh impulse.
Technical Analysis
Despite bouncing off the key EMA, the quote still lags below 1.3345/50 area comprising monthly high, which in turn portrays its weakness towards revisiting mid-month low near 1.3180. Alternatively, an upside break of 1.3350 enables buyers to target 1.3400 and June 18 high around 1.3435.
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