- USD/CAD prints a two-day winning streak while extending bounce off 1.3504.
- WTI weakness, US dollar recovery and downbeat risk catalysts propel the quote.
- The second-tier US and Canadian data could offer intermediate directions.
- Virus updates, geopolitical news can keep the driver’s seat.
USD/CAD prints mild gains of 0.10% while trading around 1.3580 during Thursday’s Asian session. The Loonie pair marks a second-day of rise following its U-turn from the weekly low of 1.3506. Though, the quote is still below Monday’s high of 1.3686.
Commodity currencies, like the Canadian Dollar, have recently been pressured amid a surge in the pessimism concerning the coronavirus’ (COVID-19) fresh wave. Apart from the most highlighted situations in Beijing, pandemic data from the US, Japan and Germany also suggest that the world is yet to overcome the deadly virus and its negative economic impacts.
While the virus woes weigh on the risk-tone sentiment and drag the USD/CAD pair, it also negatively affects the prices of Canada’s main export, crude oil. The WTI benchmark also portrays two-day losses while declining to $37.70, down 0.75% on a day, as we write.
Other than the pandemic fears, geopolitical tension in Asia and also concerning Iran weigh the market’s mood. As a result, the US 10-year Treasury yields drop two basis points (bps) to 0.713% while Japan’s Nikkei 225 also prints 0.55% losses to 22,325 as we write.
It’s worth mentioning that weaker than expected prints of Canada’s headlines inflation data, published on Wednesday, offers additional support to the prices.
Moving on, Canadian Wholesale Sales, ADP Employment Change and New Housing Price Index will join the US weekly Jobless Claims and Philadelphia Fed Manufacturing Survey to offer a busy session. Further, news concerning the virus spread and geopolitical headlines could also direct the short-term traders.
Technical analysis
A descending trend line from May 22 joins 21-day SMA to restrict the pair’s near-term upside around 1.3620/30. Though, sellers will remain cautious ahead of the downside break of the monthly bottom near 1.3315. Also likely to challenge the quote’s immediate declines could be a 200-day SMA level of 1.3475.
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