CANADIAN DOLLAR FORECAST: USD/CAD PRICE ACTION UNDER PRESSURE AS CRUDE OIL AIMS HIGHER DESPITE CORONAVIRUS SECOND WAVE RISKUSD/CA
CANADIAN DOLLAR FORECAST: USD/CAD PRICE ACTION UNDER PRESSURE AS CRUDE OIL AIMS HIGHER DESPITE CORONAVIRUS SECOND WAVE RISK
- USD/CAD pivots decrease after discovering resistance across the 1.3600 value stage
- Canadian Greenback positive factors floor as crude oil costs press larger amid pent-up demand
- Spot USD/CAD eyes Markit PMI knowledge on deck and coronavirus second wave danger
The Canadian Greenback (CAD) is buying and selling on its entrance foot towards main FX friends just like the US Greenback (USD) and Japanese Yen (JPY) thus far for Monday’s session. The truth is, spot USD/CAD value motion has dropped by about 75-pips, or 0.5% since Friday’s shut.
| Change in | Longs | Shorts | OI |
| Every day | 9% | 12% | 10% |
| Weekly | 1% | 16% | 6% |
Canadian Greenback shopping for strain appears to correspond with climbing crude oil costs. This doubtless follows draining storages amid pent-up demand as the worldwide economic system reopens from the current coronavirus lockdown.
USD/CAD & CRUDE OIL PRICE CHART: 4-HOUR TIME FRAME (14 MAY TO 22 JUN 2020)
Chart created by @RichDvorakFX with TradingView
Sometimes talking, there’s a sturdy inverse correlation between the route of crude oil and USD/CAD value motion. That stated, with crude oil costs buying and selling again above $40.00 per barrel, there’s potential for spot USD/CAD to focus on month-to-date lows. However, as crude oil hits resistance round its present stage, Canadian Greenback bulls may lack motivation to make a sustained push within the absence of crude oil follow-through.
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USD/CAD PRICE CHART: DAILY TIME FRAME (30 DEC 2019 TO 22 JUN 2020)
However, a tough rejection of the long-term 200-day exponential transferring common means that USD/CAD bears stay in management extra broadly. Taking out final week’s low close to the 1.3500-price stage may open up the door to a sharper transfer decrease – maybe towards the 1.3400-handle and 76.4% Fibonacci retracement of the Loonie’s year-to-date buying and selling vary.
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Additionally noteworthy, upcoming IHS Markit Manufacturing PMI knowledge on the US is due Tuesday, 23 June at 13:45 GMT. The newest PMI reviews stand to disclose how rapidly the worldwide economic system has recovered from the coronavirus lockdown that paralyzed enterprise exercise earlier this 12 months.
Disappointing PMI knowledge may immediate a return of demand for safe-haven currencies just like the US Greenback. In keeping with the DailyFX financial calendar, the June 2020 flash PMI for the US manufacturing sector is predicted to cross the wires at 48.Zero and shall be in comparison with the prior studying of 39.8.
Hold Studying: US Greenback Levels Rebound as VIX ‘Concern-Gauge’ Climbs, Dow Slumps
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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