- USD/CAD suffers altitude sickness after rising for the last two days.
- Oil prices grind near six-week low amid recession fears, China underpins corrective pullback.
- Fed’s Powell appears thoughtful of growth and inflation as he cites challenges for smooth landing.
- Downbeat US PMIs magnified the risk of economic slowdown, second-tier data eyed.
USD/CAD flirts with the 1.3000 psychological magnet as bulls take a breather during Friday’s initial Asian session.
The Loonie pair managed to cheer softer oil prices and the market’s rush towards risk safety, amid economic fears, during the last two days. However, the recent pause in the WTI’s further downside, as well as a lack of market activity, appears to have underpinned the quote’s inaction.
Market sentiment remained sour in the last few days as traders fear recession as the major central banks rush for higher rates. On Thursday, Federal Reserve (Fed) Chairman Jerome Powell also cited the inflation and recession woes as the challenges to ensure a smooth landing, despite expecting firmer growth this year.
Elsewhere, S&P Global Services PMI for the US slumped to 51.6 in June from 53.4 prior, not to forget missing the 53.5 forecasts. Further, the Manufacturing PMI missed the market expectation of 56 by a wide margin in June, to 52.4 versus 57.00 previous readings.
Despite the market’s pessimism, the Wall Street benchmarks closed positively due to the downbeat Treasury yields. However, the US dollar regained its strength and exert downside pressure on the commodities and the Antipodeans.
It should be noted that the WTI crude oil, Canada’s main export item, forms a higher low pattern while recently defending $104.00, after refreshing the monthly low on Wednesday. That said, the black gold’s earlier losses could be linked to the recession fears and hopes of federal gas tax relief from the US while chatters that China’s traffic light data suggests improvement in energy demand seems to have probed the oil bears of late.
To sum up, USD/CAD bulls appear to have run out of steam and hence today’s second-tier US data, as well as chatters surrounding inflation/recession, becomes necessary for the pair to extend the run-up.
Technical analysis
A successful rebound from the 10-SMA, around 1.2955 by the press time, directs USD/CAD towards the double tops marked around 1.3080.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.