Canadian dollar made considerable gains last week as Oil price crossed over $70 and US dollar lost its momentum owing to soft macro economic data release. However Loonie saw some of its gain erased owing to profit booking activities and a worse than expected Employment data. While US macro data saw mixed outcome as well, better than expected Michigan Consumer Sentiment and Expectations data helped US dollar gain slight upper hand against Loonie as trading session closed for the week. Economic Calendar has no release scheduled for Canada during first two days of the week while US Calendar has Retail sales data scheduled to release on Tuesday. Since market opened for the day the pair saw price movement remain stable around 1.27 price handle. Asian market hours have relatively less effect on this pair when compared with other major currencies. The 1.27 price range serves as a psychological resistance for gains made by loonie last week.
USDCAD Digests Gains
While the pair is expected to be relatively silent for the first two trading sessions, the latter half of week looks very promising with high volatility as positive outcome in Canadian Inflation data, US Oil Inventory readings and US Production and Manufacturing data are expected to provide bullish influence to both currencies. So far US dollar has gained nearly 50 pips and is looking to breach 1.27 handle which could result in US dollar gaining upper hand during early half of the week.
While Oil price is currently on decline since market opened today morning, the price still remains above $70 as of when writing this article and this continues to provide strong bullish support to loonie. Any unfavorable proceedings between Iran and Israel could result in another bullish bout for Crude Oil which would in turn provide positive influence to Loonie. Expected support and resistance for the pair are at 1.2725 / 1.2754 and 1.2800 / 1.2820 respectively.
This article was originally posted on FX Empire
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