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USD/CAD extends gains and approaches 1.3200

  • US dollar strengthened across the board, particularly against commodity currencies hit by a decline in prices.
  • Canadian data fails to offer support to the Loonie while Fed’s Powell testimony supports USD.
  • Pair testing again the 20-day moving average.

The USD/CAD pair rose constantly during the last seven hours boosted by a stronger US dollar. Recently printed a fresh daily high at 1.3193 before bouncing modestly to the downside. It was hovering around 1.3180/85, up 50 pips for the day.

Canadian data showed that Manufacturing Shipments in May rose 1.4% above the 0.5% expected, while previous month numbers were revised higher (from -1.3% to -1.1%). The loonie kept it bearish bias offset USD strength. Fed’s Chairman Powell mentioned that the correct policy is to keep raising rates at a gradual pace. At the moment, he is at the Senate Banking Committee, answering the senators.

The US Dollar Index bounced from five-day lows and climbed back above Friday’s closing level. At the same moment, crude oil reached a fresh weekly low and gold tumbled to the lowest since July 2017.

USD/CAD Levels to watch

The move to the upside has been capped so far below the 20-day moving average that stands at 1.3195/1.3200. The mentioned MA offered resistance also last week, so a consolidation on top could signal more gains ahead. The positive tone remains in place. To the downside, immediate support is seen at 1.3160, 1.3105/10 and 1.3060

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