- Crude rises to fresh five-month high as supply crunch concerns join demand driving news reports.
- 100-day SMA could attract short-term traders’ attention.
USD/CAD drops to 1.3315/20 ahead of European open on Wednesday. The quote re-tests 100-day simple moving average (SMA) as prices of Crude oil, Canada’s main export, continue marching north to a five-month high. US data, EIA stocks and developments surrounding the US-China trade negotiations could be next on investors’ radar to watch.
WTI crude oil gave little importance to the weekly API stocks as a news report from Reuters that the US planning to tighten its sanctions over Iran and Venezuela amid a power outage at Venezuela kept pleasing energy buyers.
The USD/CAD pair earlier bounced off the 100-day SMA figure as the US Dollar (USD) strengthened on its safe-haven demand.
While supply crunch signals propelled Crude prices and dragged the pair downwards, Financial Times reports that the US and China are near to a trade deal favored an increase in future energy demand and strengthened the Loonie buyers further.
With Chinese lawmakers led by Vice Premier Liu He are in Washington, developments surrounding the trade deal could well be observed and might have a negative impact on the USD/CAD pair.
At the data front, the US ADP employment change, ISM non-manufacturing PMI and weekly official crude oil stocks change from the EIA could entertain Loonie traders.
ADP report might signal a reduction in employment to 170K figure from 183K earlier whereas ISM non-manufacturing PMI might also soften to 58.0 from 59.7. Further, the official crude oil inventories for the week ended on March 29 are expected to decline by -1.175 million compared to the previous increase of 2.800 million additions.
USD/CAD Technical Analysis
100-day SMA level of 1.3315, recent lows surrounding 1.3300 and 50-day SMA level near 1.3280 can limit the pair’s immediate declines ahead of dragging it to 1.3230 and 1.3200 rest-points.
Meanwhile, 1.3380 and 1.3410 could try restricting the quote’s near-term advances whereas 1.3440 and 1.3480 might entertain buyers afterward.
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