USD/CAD remains firm around 1.3490 as WTI pullback supports BOC-led rally

BOC’s dovish statement and increase in the US crude stocks propel the USD/CAD pair.
With the lack of Canadian data, the US economic calendar likely to be in focus.

Anil Panchal FXStreet

USD/CAD is on the bids near 1.3490 ahead of Europe open on Thursday. Increase in the US crude oil stocks added into the previous rally backed by the BOC’s dovish statement and greenback’s safe-haven demand.

On Wednesday, Bank of Canada (BOC) left its monetary policy unchanged but cut in overall growth rate for 2019 and dovish statements concerning the economic outlook triggered the Loonie’s weakness. Selling pressure was so immense that the Governor Stephen Poloz also failed to tame the bears with his upbeat economic comments.

Adding to the Canadian Dollar (CAD) weakness was more than forecast 1.255 million barrels’ increase in the US crude oil stocks change to 5.479 million barrels for the week ended on April 19. The Energy Information Administration (EIA) data joins earlier industry reports showing an increase in the US stockpiles.

Crude prices tend to have a higher impact on the CAD as being the largest export earner for the Canadian economy.

Looking forward, the US weekly jobless claims and February month prints of durable goods orders are likely to dominate market sentiment. Forecasts suggest a large magnitude of expansion in durable goods orders’ data compared to a small increase in weekly jobless figure.

USD/CAD Technical Analysis

An ascending trend-line from late-January and multiple lows from December 24 to January 02 may question the strength of buyers around 1.3565/70, a break of which can recall 1.3570, 1.3610/15 and 1.3665 on the chart.

Alternatively, March month high near 1.3470 seems immediate rest ahead of 1.3440 and 1.3400 rest-points to watch.

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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