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USD/CAD Daily Price Forecast – Loonie Skyrocketing to Weekly Top Levels Amid 1.67% Drop in Oil Prices

Nikhil Khandelwal

Loonie continues to stay on recovery mode hovering near its weekly high level. The pair kicked off the day near 1.3439 levels, continuing last day’s uptrend. The sudden fall in the crude prices has majorly contributed to the USD/CAD pair upliftment.

Earlier the day, Crude Oil WTI Futures suffered a massive pullback. The Crude prices went straight down, breaching the strong resistance line near $60.64 per barrel. Oil prices had continued to slide following last night EIA reports. The reports revealed huge US crude stockpiles computed since May 17. The market had expected -0.599M while the actual reports showed 4.740M, which was way much higher than the estimates. An increased count on this front reveals a lack of demand among the crude buyers hammering its price value.

Canada’s largest export commodity is Crude Oil. Even a slight decline in this benchmark will have an opposite effect on the pair. Hence, with the sudden plunge in the Oil prices, the pair escalated reaching new heights.

Meanwhile, another supporting factor for the Loonie was the USD Index. The Greenback extended yesterday’s upward rally taking rounds near 98.20 levels. The Index marked its fresh weekly highs near 98.26 levels twice today. Last night, FOMC minutes had set a positive outlook for the Greenback. The Fed members mentioned that the rates would remain unchanged and rate cuts, if any, would be at a later point in 2019. Hence, in the near-term, the Fed would ensure to keep the rates intact between 2.25-2.50%.

Though USD Index is traveling at its top levels, concerns over US-Sino trade talks set the risk-off condition.

USD/CAD Impacting Events

On the CAD front, the March MoM Wholesale Sales report is the only event lined up today. The Street analysts estimate the Sales figures to come near 0.9% to the previous 0.3%.

Few significant US economic indexes, along with some Fed speeches, make the day a “Super Thursday”. First, the market would witness Unemployment figures. The Continuing and the Initial Jobless Claims are hoped to come near 1.67M and 215K respectively. Second, the Markit Economics will broadcast the PMI monthly reports on the Manufacturing sector, Service sector, and Composite of both sectors. And, the analysts expect the Services PMI to increase with 0.2% today. Third, the MoM New Home Sales report for the April is anticipated to go bearish with the Greenback. Laterwards, the market awaits the EIA’s Natural Gas Storage Change since May 17 to report around 112 billion.

Technical Analysis

30-Minutes Chart

USDCAD 30 Min 23 May 2019

The Loonie took a massive upliftment since its opening near 1.3437 levels. The USD/CAD pair stood above the EMA of the Ichimuko Clouds (IC) alluding bullish prospects. Also, the Green Ichimuko Cloud positioned below the pair and was inclined upwards, indicates heavy buying. If the pair travels further north, then the resistance point near 1.3513 levels awaits.

3-Hours Chart

USDCAD 180 Min 23 May 2019

The Loonie hovered above the Central Line of the Bollinger Bands (BB), alluding a bull call. Notably, the pair crossed the upper boundaries of BB, and this trend signaled bullish outlook. The 50-days, 100-days and 200-days Simple  Moving Averages (SMA) stood below the Loonie, and refer bullish stance. The Relative Strength Index (RSI) hovered near 67 levels, signaling heavy buying.

This article was originally posted on FX Empire

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