- Failure to respond to upbeat catalysts amid trade tension highlights today’s Washington meet.
- Second-tier data could also offer intermediate moves.
Alike other commodity-linked currencies, the Canadian Dollar (CAD) also had to bear the burden of uncertainty ahead of today’s trade negotiations in Washington. As a result, the USD/CAD pair aims to clear immediate trend-line resistance by trading near 1.3480 despite positive catalysts for Canada’s main export item, crude oil, flashing up on the line during early Thursday.
Talking about the positive signs, the political rift between the US and Iran is likely heading towards a geopolitical event after the US recently announced fresh sanction on Iran’s metal exports.
Further, the US oil stocks, as conveyed by the weekly report from the Energy Information Administration (EIA) for seven days to May 03, registered surprise decline. The inventory level dropped -3.963 million barrels versus +9.934 million barrels prior and the forecast of +1.215 million barrels.
However, crude prices couldn’t enjoy the upside for long latest signals from the US and China suggests more troubles agreeing over the much-awaited trade deal wait for the world’s two largest economies. Among them, the US President Donald Trump’s comments that “China broke the deal” got major attention.
In addition to the result trade talks, Canada’s new housing price index and trade balance for March will also be in the spotlight. Total Canadian international merchandise trade is likely to have increased to $-2.45 billion from $-2.90 billion whereas no change is expected in the 0.0% new house price index data.
On the other hand, the US is also up for releasing monthly prints of trade balance and PPI together with weekly initial jobless claims. Most of the data are expected to come in positive while a speech from the Federal Reserve Chairman Jerome Powell could offer surprises to wait.
Technical Analysis
A successful break of 1.3490 trend-line resistance can trigger the quote’s rally towards April highs near 1.3520/25 with a four-month-old ascending resistance-line at .3540 likely being follow-on upside barrier.
Meanwhile, 1.350, 1.3400 and 50-day simple moving average (SMA) near 1.3385 can entertain sellers in case of a pullback.
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