- USD/CAD edges higher following the strongest run-up in two months.
- WTI remains sluggish amid hopes of easing Gaza tussle, strong dollar.
- FOMC minutes supersede upbeat Canadian inflation, US-Canada border close also favor pair buyers.
- US weekly job numbers, Canadian ADP Employment Change and housing data will be the key.
USD/CAD grinds higher around 1.2130 after snapping a three-day downtrend, not to forget posting the strongest gains since March, the previous day. On Wednesday, the Loonie pair snapped a three-day losing streak while portraying recovery from May 2015 low as risk-off mood put a bid under the US dollar.
Comments from St. Louis Fed President James Bullard, pushing the Fed towards post-pandemic move joined the bullish FOMC Minutes suggesting some policymakers want to discuss tapering. Chatters over the US central bank’s discussion on the monetary policy adjustments drowned market sentiment and propelled the US dollar.
Not only the US dollar index (DXY) but the US Treasury yields were also propelled by the risk-off mood at the end of Wednesday’s trading.
Alternatively, Wall Street benchmarks flashed third consecutive day in the red whereas the S&P 500 Futures drop 0.20% by the press time.
It’s worth mentioning that an extension to the US-Canada border closure and WTI’s downbeat performance, mainly due to supply fears, also weigh on the USD/CAD prices.
Amid the risk-aversion wave, Canada’s upbeat Consumer Price Index (CPI) figures for May couldn’t save the pair sellers.
Moving on, Canada’s monthly ADP Employment Change and New Housing Price Index for April may offer an intermediate direction to USD/CAD ahead of the US Weekly job numbers. It should, however, be noted that the risk catalysts keep the driver’s seat and may help the buyers going forward.
Technical analysis
A daily closing beyond 10-day SMA and a 12-day-old falling trend line enables USD/CAD to target the previous week’s top near 1.2200. However, lows marked in April and March, respectively around 1.2265 and 1.2365 could challenge the bulls afterward. Meanwhile, fresh selling could wait for 1.2080 breakdown.
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