- USD/CAD holds onto recent recovery gains.
- WTI benefits from comments of Kuwait’s oil minister and geopolitical tension from the Middle East.
- US CPI, trade/political news will be important to follow.
With WTI prices remaining firm, the USD/CAD pair again aims to confront 100-day exponential moving average (EMA) while taking the bids to 1.3240 on early Tuesday.
The pair recently benefited after oil responded positively to comments from Kuwait’s oil minister Khaled al-Fadhel that his country was “fully committed” to implementing an agreement between oil-exporting countries to cut production in order to support crude prices. Adding to the upside could be receding geopolitical tension from China after Hong Kong airport resumed operations following a day of closure due to 10-week-old protests.
However, the quote still remains under pressure as the US-China trade deal pessimism still weighs on the commodity-linked currencies and commodity prices.
Moving on, the US Consumer Price Index (CPI) data for July will be the key for the pair traders amid lack of Canadian catalysts. The headline CPI is expected to rise to 0.3% from 0.1% on MoM basis while likely increasing to 1.7% versus 1.6% earlier on a yearly format. Though, like weakness in the CPI ex-Food & Energy (MoM) number from 0.3% to 0.2% could limit the US Dollar (USD) gains.
Technical Analysis
A sustained break of 100-day EMA level of 1.3250 favors the pair’s run-up towards August 07 low near 1.3267 and then to the monthly high around 1.3346. Alternatively, 1.3200 becomes strong support, a break of which can recall early July high near 1.3140 on the chart.
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