Yahoo Finance USD/CAD Daily Forecast – Pair Rebounding from 3-Month Low amid Renewed Trade Hopes
The Loonie pair continued to extend last day’s upward rally on Monday amid positive US-China trade updates. On the Saturday G20 meeting, both the parties agreed over a trade truce pact. The new agreement offered concessions highlighting no new tariffs in the upcoming sessions. Also, China has agreed to purchase a “tremendous amount” of agricultural products from the US counterpart.
“The temporary agreement does little to resolve the fundamental conflicts over trade issues that broke down talks in May and does not amount to a sustainable solution for Huawei,” wrote analysts at Eurasia Group, a political risk consultancy.
In the early hours, the USD/CAD pair took the flight and breached the 1.3102 robust resistance mark. The pair touched and rebounded from the daily high near 1.3108 level in the Asian session.
Crude Oil WTI Futures soared more than a dollar per barrel in the initial hours. The OPEC members have decided to extend the supply cuts at least until December 2019. Iran has come back and has joined the top producer, Saudi Arabia. Also, Iran and Russia look for actions that would help in uplifting the Oil prices in catering the odds caused out of an economic slowdown.
Significant Economic Events
The Institute of Supply Management (ISM) will come up with some crucial June reports in the early European trading session. The market takes a bearish stance on the ISM Manufacturing PMI and Prices Paid this time. Street Analysts expect a June PMI data 2.16% decline over previous 52.1 points.
Anyhow, the consensus estimates the June Manufacturing PMI published by Markit Economics, to report in-line with the previous 50.1 points.
Today, the Canadian economic docket remains light amid lack of economic events on account of Canada day. Also, there are no Oil-specific events like API or EIA Crude reports lined up to tweak the commodity prices. However, OPEC members meet in Vienna today, followed by further talks with Russia and other allies tomorrow.
Technical Analysis
1-Hour Chart
In the near term, the prospect for the pair’s future movements, remain neutral as the 50-day SMA move along with the pair. Both the significant 100-day and 200-day SMA was hovering above the USD/CAD pair, signaling a bearish trend. Somehow, the histograms of the MACD technical indicator was pointing north showing signs of a short term upliftment. However, any such upward movement would get capped at around 1.3138 resistance handle. On the flip side, the next support line stands near 1.3060 mark. Hence, the pair might remain clinched near its three-month bottom at least for the next few sessions.
4-Hour Chart
On a broader chart, the Ichimoku clouds showcased long term bearish trend. However, looking at the north facing pair, the future actions might display a slightly mitigated downtrend. Though the Ichimoku Clouds and base line hovered above the USD/CAD pair, the position of the conversion line was something worth noticing. In the upcoming sessions, traders can expect slight positive movements in the coming sessions.
This article was originally posted on FX Empire
