USDCAD falls as crude prices rise and the USD weakens; downward possibility is constrained for the near term
USDCAD Key points
The USDCAD has retreated off its strongest point as early June, which it reached on Thursday.
Recovering oil prices support the CAD while limiting its upward potential in the face of a weaker Dollar.
The Fed’s aggressive view could help prevent further US dollar and duo declines.
USDCAD dips a bit but retains overall strength
The USDCAD duo declines a few points off the mid-1.3500 level. as well the highest value until June. It reached on Thursday, and falls to a new daily bottom within the initial European period. Spot rates, on the other hand, retain to stay over the psychological level of 1.3500 barrier. Thus appear prepared to continue the current solid upward movement seen from the start of this month’s trading.
The prices of crude oil are making a minor rebound off a 2-day decline of two weeks. That appear to have finally broken a 3-day falling run. This is seen supporting the commodity specific CAD The US dollar on the contrary. Has weakened from a 2-month high, becoming a further factor acting as a negative regarding the USDCAD pairing. Nevertheless, the underlying context appears to be heavily skewed to the benefit of negative sellers. Necessitating considerable prudence while preparing for a substantial correction in downturn.
USDCAD Sentiment Expectations – Bullish (Short-Term)
According to the figures, only 36 percent of retail investors remain net long USDCAD. It represents the lowest level of risk to the upside until the end of May. Since majority odds are currently on the negative. This indicates that values might keep on to rise. This is due to a drop in upward sensitivity of 3.81 percent & 17.66% from Wednesday and the prior week. Keeping this in consideration, the total sensitivity picture suggests a more bullish opposing investing tendency.
Markets are worried about the deteriorating business climate in China, the globe’s largest oil consumer. Which in addition to concerns that economic obstacles from swiftly increasing borrowing rates would dampen buyer demand. Which ought to keep any major gain of the oil at bay. Additionally, increasing optimism that the US Fed would maintain the rate of interest elevated for a while benefit USD bullish traders. Thus assist in reducing the USDCAD duo’s negative least this moment
Aside from that, the prevailing risk-off atmosphere, as shown by a usually softer mood in the stock markets. Which lends validity to the safe-haven US dollar’s favorable prognosis. This implies that the USDCAD duo’s trajectory of most resistance remains to the higher. Investors are currently looking ahead to the US economic calendar. Which includes the typical Weekly Initial Jobless Claims plus the Philly Fed Manufacturing Index. The statistics could potentially have an impact on the dollar’s value patterns and offer extra push as well.
Technical Analysis and Perspective
On the daily graph, the USDCAD proved a breach over the March declining trend line. Which is indicating a growing positive technical tendency. The 61.8 percent Fibonacci regression mark at 1.3568 provides immediate barriers right now. Following a confirmed move up beyond there, the emphasis shifts towards the April peak of 1.3668 zone.
Assuming the case of a downward trend, right away support seems to be the 1.3477 Fibonacci equilibrium level. That prior descending trend line. Which might act as fresh support, is directly under that. If otherwise, continuing a loss across the trend line provides a more negative technical partiality, allowing a return from the 1.3093 – 1.3139 supporting region.
Current Trading Price at the time of writing
- 35149-0.00169 (-0.12%)
As of: Aug 17, 2023 10:33 UTC
Open
1.35321
High
1.35547
Low
1.35117
