- Overall USD strength, Crude weakness propels USD/CAD further up towards key resistance confluence.
- OPEC refrains from any change to production cuts, the US President Trump readies to talk to Iran.
- The US data, trade/political news will keep entertaining traders.
The US Dollar’s (USD) overall strength and WTI weakness keep firming the USD/CAD pair up towards key upside barrier as it takes the bids to 1.3215 during early Friday.
The pair gained traction after the US President Donald Trump showed readiness to talk to Iran and North Korea in a bid to end the political tussles between the economies, which in turn dragged the Crude, highest export item of Canada. However, comments from the US Treasury Secretary Steve Mnuchin still highlight the Trump administration’s maximum pressure policy.
The momentum recently strengthened as the US Dollar (USD) carries the gains from the upbeat inflation data and also because of the European Central Bank’s (ECB) dovish monetary policy decision. Also supporting the move was Canadian New Housing Price Index data that disappointed Canadian Dollar (CAD) buyers with -0.1% mark against 0.0% forecast.
It should also be noted that trade optimism could do little for the Canadian Dollar (CAD) as odds of the Bank of Canada’s (BOC) dovish appearance have increased recently.
With no major data/events up for publishing from Canada, investors will keep an eye over the US Retail Sales and trade/political headlines for fresh impulse. “We expect retail sales to advance 0.3% m/m in August following the stronger 0.7% rise in the prior month. The gain should be helped by another firm increase in sales in the key control group as consumer fundamentals remain sound. In the details, the steady increase in core sales and a small rebound in auto purchases should more than offset a decline in sales at gasoline stations, which reflects a notable drop in gasoline prices in August,” says TD Securities.
Unless breaking 1.3233/37 resistance-confluence including 21 and 50-day exponential moving averages (EMA), prices are less likely to rise towards 1.3300. However, 1.3145/35 area including the latest lows and early-July tops could restrict pair’s near-term declines.
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