USD/CAD snaps two-day losing streak as US dollar gains beat WTI recovery

  • USD/CAD justifies the previous day’s pullback from 1.3270.
  • Greenback keeps the throne amid mixed sentiment, WTI ignores API data.
  • US CPI will decorate the calendar, risk catalysts can entertain traders as well.

USD/CAD keeps the early-Asian recovery gains while trading around 1.3330, up 0.28% on a day, ahead of Wednesday’s European session. Amid a lack of domestic catalysts and the market’s emphasis on the US dollar gains, the loonie pair fails to take clues from the recent recovery in WTI, Canada’s biggest export item.

The American currency recovers from more than two year low amid hopes of US stimulus and vaccine news. US dollar index (DXY) prints four-day winning streak while taking the bids near 93.85, up 0.21% on a day, by the press time. Even if American Congress hasn’t yet started discussing the coronavirus (COVID-19) relief package, markets stay upbeat amid expectations that President Donald Trump will conquer any barriers as he recently did with executive orders for unemployment benefits. Talking about the vaccine, the Republican Leader Trump cited a deal with Moderna to mark his efforts to overcome the pandemic.

On the contrary, WTI fails to respect weekly inventory data from the private data provider the American Petroleum Institute’s (API). As per the latest upside, API Weekly Crude Oil Stock eased the previous declines in inventories while flashing a draw of -4.4M during the week ending on August 07. The reason could be traced from the market’s concerns that the US and China’s phase one deal is still on the table and can confront the virus-led economic slowdown. After yesterday’s upbeat comments from the People’s Bank of China’s (PBOC) Governor Yi Gang, China’s Vice Foreign Minister showed readiness to keep the trade talks on the table.

Elsewhere, RBNZ’s QE fails to derail market sentiment ahead of the US Consumer Price Index (CPI) data for July. The headlines inflation is expected to recover from 0.6% prior to 0.8% but the CPI ex Food & Energy (YoY) may recede from 1.2% to 1.1% during the reported month.

Other than the US CPI, traders will also keep eyes on the US-China trade news, virus updates and news on the US aid package for further direction.

Technical analysis

Bearish MACD and five weeks of continuous decline favor the USD/CAD bears. As a result, a confluence of 200-week SMA and an ascending trend line from February 2018, around 1.3175/70 become the landmark for traders. On the contrary, any pullback will be considered ephemeral unless crossing a downward sloping trend line from March high, at 1.3430 now.

Additional important levels

Today last price 1.3338
Today Daily Change 37 pips
Today Daily Change % 0.28%
Today daily open 1.3301
Daily SMA20 1.3406
Daily SMA50 1.3498
Daily SMA100 1.375
Daily SMA200 1.3531
Previous Daily High 1.3361
Previous Daily Low 1.3271
Previous Weekly High 1.3451
Previous Weekly Low 1.3234
Previous Monthly High 1.3646
Previous Monthly Low 1.3331
Daily Fibonacci 38.2% 1.3305
Daily Fibonacci 61.8% 1.3326
Daily Pivot Point S1 1.3261
Daily Pivot Point S2 1.3221
Daily Pivot Point S3 1.3171
Daily Pivot Point R1 1.3351
Daily Pivot Point R2 1.3401
Daily Pivot Point R3 1.3441



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