USD/CAD: One more pullback from 12-week old resistanceline

US Dollar pullback dims Loonie weakness past EIA data.
12-week old descending resistance-line, at 1.3415, continues to act as the strong upside barrier.

Anil Panchal FXStreet

The USD/CAD pair struggles around the day’s low of 1.3400 ahead of the European open on Thursday. The quote initially stretched its gains overnight on the EIA’s oil stocks report but failed to remain strong after the upbeat developments surrounding China pushed global traders away from the greenback.

The Energy Information Administration’s (EIA) oil stocks report for the week ended on March 22 followed the American Petroleum Institute (API) numbers by rising to 2.800 million barrels against the forecast of 0.309 million and -9.589 million prior.

With the Crude being Canada’s highest export earner, USD/CAD responded positively to the inventory report. It should also be noted that the US Dollar was already on a buying mode backed by the safe-haven demand.

However, the gains couldn’t last long and the quote again failed to successfully clear 12-week old resistance-line, at 1.3415 now, after positive news from China dimmed the greenback’s allure.
China’s Premier Li Keqiang sound positive about the world’s second-largest economy in his appearance at the Boao Forum while the US officials also lauded progress over the US-China trade talks.

Moving forward, the absence of Canadian data highlights the importance of the US economic calendar that carries some of the important statistics like the gross domestic product (GDP), initial jobless claims, personal consumption and pending home sales.

While final reading of the Q4 2018 GDP is likely to decline to 2.4% from 2.6%, initial jobless claims could rise to 225K from 221K during the week ended on March 22. Further, personal consumption and core personal consumption may remain unchanged at 1.5% and 1.7% during Q4 whereas pending home sales growth may soften in February to 0.7% from 4.6% marked in the earlier month.

USD/CAD Technical Analysis

Considering the USD/CAD pair’s another reversal from the 1.3415 resistance-line figure, the sellers can aim for 1.3370 and 100-day SMA level near 1.3310.

Meanwhile, a successful break of 1.3440 and 1.3470 could validate the quote’s strength in targeting 1.3510 if it ticks up the 1.3415 mark.

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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