USD/CAD flirts with technical pattern high

• USD/CAD traders look forward to today’s Canadian Ivey PMI number.
• The pair is now flirting with the top of a pattern on the hourly chart.

Yesterday was a strange day for the Canadian dollar as it started well with oil trading higher and commodities currencies outperforming.

Then in the afternoon as US traders entered the fray the USD strength really kicked in and the pair lost some of the earlier gains.

The pair is often looked at as risk vs commodities but what do you do when both are performing well?.

On the oil front, the Saudi’s have just come out and said they are looking to push  OPEC members to comply with curbs  rather than make  more production cuts.

This goes against some of the recent rhetoric from other OPEC members like Iran who have suggested more production cuts could becoming.

The Saudi influence is key to OPEC though so in the view of many analysts whatever they say may go.

Looking back at USD/CAD now, today we get the release of the latest Ivey PMI figure and it is expected to improve to 49.3. If there is a positive result it could negate some of the gains seen from yesterday’s positive US ISM non-manufacturing number. Last months Ivey PMI was the first reading in contractionary territory since June 2016. This reading is also suggesting that  Canadain PMI could  still be in contraction but let’s wait and see.

The hourly chart below is showing that USD/CAD is pushing to the top of a technical pattern. If the USD strength continues to persis then we could see a break to the upside but as Fed members are on a wait and see mode the market might just cool. The Bank of Canada (BoC) have recently turned more dovish so the Canadian Dollar has been adjusting to the bearish shift from the central banks but will it be enough to take USD/CAD to 1.32?.