- USD/CAD manages to recover from multi week bottom, stays below the monthly resistance line.
- Doubts over US-China trade relations, OPEC’s output cut trigger the pair’s bounce.
- Second-tier data from the US/Canada, Fedspeak and trade headlines will be in focus.
Following its U-turn from the seven-week low, USD/CAD takes the rounds to 1.3165 during early Tuesday. The pair earlier dropped on the upbeat sentiment surrounding the US-China trade deal and the sustained upside of oil, Canada’s key export.
The latest pullback could be attributed to the market’s doubts on the energy benchmark’s rise as well as on the future trade relations between the United States (US) and China. Media releases from China keep spreading doubts over the US-China trade relations despite the recently agreed phase-one deal. Markets have cheered the outcome at the week’s start with the White House Adviser Larry Kudlow saying the US exports to China will be doubts on the deal.
Given trade headlines having widespread impacts, not limited to the commodity-linked currencies, oil prices also stopped the previous run-up that propelled WTI to multi-month high on Friday. Further, doubts over the latest production cut accord by the Organization of the Petroleum Exporting Countries (OPEC) and Russia also contributed to the black gold’s pause from the three-day-old rise.
Also, the global rating giant Fitch recently came out with its analysis of the Asia-Pacific market and brightened the prospects of corporate being more negative in 2020.
While trade news can keep entertaining the pair traders going forward, Canada’s October month Manufacturing Shipments, coupled with the November month housing market and industrial production detail from the US, will also be the key to watch.
Technical Analysis
Unless breaking a monthly trend line, now at 1.3190, prices are less likely to avoid visiting 1.3100 round-figure.
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