USD/CAD continues to follow WTI strength, trade positive news

A surprise drop in API oil stock report, optimism surrounding the G20 triggered the CAD strength.
Canadian CPI and FOMC are on the trades’ radar for now.

Anil Panchal FXStreet

In addition to a surprise decline in private crude inventory data, fresh optimism surrounding the US-China trade deal also lures USD/CAD sellers as the quote drops to the intra-day low of 1.3373 during early Wednesday.

A contraction in April month manufacturing shipments from Canada to -0.6% versus +0.4% forecast couldn’t disappoint the Canadian Dollar (CAD) buyers after the American Petroleum Institute (API) announced a surprise drop in weekly oil stocks.

Adding to the optimism could be latest positive media announcements favoring a trade talks between the US and China at the sidelines of the G20 and a resumption of negotiations by second-tier officials of both the sides ahead of the event.

Investors may now await fresh clues from May month CPI and Bank of Canada’s (BOC) core consumer price index (CPI) numbers prior to observing updates from the US Federal Reserve.

While the Canadian CPI is expected to rise to 2.2% from 2.0% On a yearly format, the core CPI might soften to 1.2% from 1.5%.

On the other hand, the US central bank isn’t expected to alter its present monetary policy but the Chairman Jerome Powell might keep being cautious during his press conference.

Technical Analysis

21-day simple moving average (SMA) level of 1.3405 acts as immediate upside resistance, a break of which can trigger the pair’s fresh advances targeting 1.3470 and 1.3510 numbers to the north.

On the contrary, 100-day SMA level of 1.3355 may limit the pair’s declines in the direction to 1.3280 comprising 200-day SMA.

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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